Asta Funding Reports Second Quarter and Six Months Fiscal 2008 Results

ENGLEWOOD CLIFFS, N.J., May 19 /PRNewswire-FirstCall/ -- Asta Funding, Inc., (NASDAQ:ASFI), a consumer receivable asset management and liquidation company, today reported results for the three and six months ended March 31, 2008.

Revenues for the three months ended March 31, 2008, were $33,882,000, an increase of 4% compared to revenues of $32,608,000 a year ago. The Company reported a net loss for the three months ended March 31, 2008 of $7,707,000, or $0.54 per diluted share, compared to net income of $12,552,000, or $0.85 per diluted share, in the same prior year period.

Revenues for the six months ended March 31, 2008 were $68,157,000, an increase of 18% compared to revenues for the six months ended March 31, 2007 of $57,753,000. Net income for the six months ended March 31, 2008 was $5,607,000 or $0.38 per diluted share, versus $23,878,000, or $1.63 per diluted share, for the same period a year earlier.

Net cash collections from collection of consumer receivables acquired for liquidation was $44.9 million for the second quarter, versus $62.2 million in the prior year's quarter. Net cash collections from collection of consumer receivables acquired for liquidation was $95.0 million for the six months ended March 31, 2008, compared to $104.1 million in the prior year's period. Net cash collections represented by account sales of consumer receivables acquired for liquidation was $4.9 million or 9.8% of net cash collections in the quarter, compared to 18.3% in the second quarter of fiscal 2007.

Gary Stern, President and Chief Executive Officer, said, "With regard to our large portfolio purchase, consummated a little over a year ago, our actual collections were slower than our original expectations and we incurred a significant impairment of approximately $30.3 million. This is a result of a variety of factors, including the effects of the economic downturn."

Mr. Stern added, "Our total bank debt was approximately $293.9 million at March 31, 2008 and as of today stands at approximately $269.0 million. Our business structure remains solid with stockholders' equity at $17.21 per share at the end of the second quarter and we will work diligently to improve shareholder value."

Mr. Stern concluded, "We plan on having an investor day and hope to announce a date and details in the near future."

Based in Englewood Cliffs, NJ, Asta Funding, Inc., is a leading consumer receivable asset management company that specializes in the purchase, management and liquidation of performing and non-performing consumer receivables. For additional information, please visit our website at http://www.astafunding.com/.

Except for historical information contained herein, the matters set forth in this news release are "forward-looking" statements (as defined in the Private Securities Litigation Reform Act of 1995.) Although Asta Funding, Inc. believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, there can be no assurance that its expectations will be realized. Forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from Asta Funding, Inc.'s expectations. Factors that could contribute to such differences include those identified in Asta Funding, Inc.'s Form 10-K and Form 10-K/A for the fiscal year ended September 30, 2007, Form 10-Q for the quarter ended December 31, 2007 and those described from time to time in Asta Funding, Inc.'s other filings with the Securities and Exchange Commission, news releases and other communications, including that the portfolio purchase described in this press release may not be consistent with Asta's initial valuation analysis, that the terms of the new financing obtained, or the anticipated benefits of the portfolio purchase may not meet Asta's expectations, that Asta may experience operational difficulties in acquiring a portfolio of this size, that Asta received only limited representations and warranties with respect to the quality, quantity and characteristics of the portfolio and that there are other risks associated with the portfolio. Asta Funding, Inc.'s reports with the Securities and Exchange Commission are available free of charge through its website at http://www.astafunding.com/.

ASTA FUNDING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - DATA
(Unaudited)

Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
March 31, March 31, March 31, March 31,
2008 2007 2008 2007
Revenues:
Finance income, net $33,878,000 $32,353,000 $68,013,000 $57,294,000
Other income 4,000 255,000 144,000 459,000
33,882,000 32,608,000 68,157,000 57,753,000

Expenses:
General and
administrative 7,124,000 5,790,000 12,929,000 10,878,000
Interest 4,711,000 3,779,000 10,652,000 5,298,000
Impairments 35,000,000 2,412,000 35,000,000 2,412,000
46,835,000 11,981,000 58,581,000 18,588,000

Income before equity
(loss) in earnings
of venture and
income tax (12,953,000) 20,627,000 9,576,000 39,165,000

Equity in (loss)
earnings of venture (1,000) 475,000 (78,000) 975,000

Income tax (benefit)
expense (5,247,000) 8,550,000 3,891,000 16,262,000
Net (loss) Income ($7,707,000) $12,552,000 $5,607,000 $23,878,000

Net (loss) income
per share:

Basic ($0.54) $0.91 $0.40 $1.73
Diluted ($0.54) $0.85 $0.38 $1.63

Weighted average
number of common
shares outstanding:

Basic 14,201,674 13,848,194 14,059,142 13,772,538
Diluted 14,201,674 14,744,499 14,742,549 14,647,556

ASTA FUNDING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS - DATA

March 31, September 30,
2008 2007
(Unaudited)
ASSETS
Cash $3,589,000 $4,525,000
Restricted cash 5,048,000 5,694,000
Consumer receivables acquired for
liquidation (at net realizable value) 512,256,000 545,623,000

Due from third party collection agencies
and attorneys 5,211,000 4,909,000
Investment in venture 1,162,000 2,040,000

Furniture and equipment, net 797,000 793,000
Deferred income taxes 22,465,000 12,349,000
Other assets and investments 4,285,000 4,323,000

Total assets $554,813,000 $580,256,000

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Debt $293,857,000 $326,466,000
Other liabilities 3,558,000 7,537,000
Dividends payable 571,000 557,000
Income taxes payable 11,397,000 8,161,000

Total liabilities 309,383,000 342,721,000

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 and
outstanding - 14,276,158 at March 31,
2008 and 13,918,158 at September 30,
2007 143,000 139,000
Additional paid-in capital 68,442,000 65,030,000
Retained earnings 176,845,000 172,366,000

Total stockholders' equity 245,637,000 237,535,000

Total liabilities and stockholders' equity $554,813,000 $580,256,000

First Call Analyst:
FCMN Contact: diana@wolfeaxelrod.com

Source: Asta Funding, Inc.

CONTACT: Mitchell Cohen, CFO of Asta Funding, Inc., +1-201-567-5648; or
Stephen D. Axelrod, CFA, steve@wolfeaxelrod.com, or Alisa D. Steinberg, Media,
alisa@wolfeaxelrod.com, both of Wolfe Axelrod Weinberger Assoc. LLC,
+1-212-370-4500, fax +1-212-370-4505, for Asta Funding, Inc

Web site: http://www.astafunding.com/

2008-05-19 17:17:32 0365719 PRNEWSWIRE