UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

  

FORM 8-K

 

 

 

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d)

of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): August 13, 2019

 

 

ASTA FUNDING, INC.

(Exact name of registrant as specified in its charter)

 

                

Delaware

 

001-35637

 

22-3388607

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

 

210 Sylvan Avenue, Englewood Cliffs, New Jersey

 

07632

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code: 201-567-5648

(Former name or former address, if changed since last report.)

 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

   

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

   

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

   

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

 

 

 

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common stock, par value $0.01 per share

 

ASFI

 

Nasdaq Global Select Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

  

 

 

 

 

Item 2.02 Results of Operations and Financial Condition

 

On August 13, 2019 Asta Funding, Inc. issued a press release announcing its financial results for the third quarter of the fiscal year ended September 30, 2019, the quarterly period ended June 30, 2019. A copy of the press release, including financial information released as a part thereof, is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

 

The information in this Item 2.02 of this Current Report, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that Section. The information in this Item 2.02 of this Current Report, including Exhibit 99.1, shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, or the Exchange Act.

 

Item 9.01 Exhibits

 

(d) Exhibits. The following exhibit is furnished with this Current Report on Form 8-K:

 

No.

Description       

 

 

99.1

Press Release dated August 12, 2019, announcing financial results for the third quarter of Fiscal Year 2019

 

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

ASTA FUNDING, INC.

 

 

 

Date: August 13, 2019

By:

/s/ Bruce R. Foster                                   

 

 

Bruce R. Foster

 

 

Chief Financial Officer

   

Exhibit 99.1

 

Investor Contact:

 

Bruce R. Foster, CFO

Asta Funding, Inc.

(201) 567-5648

 

Asta Funding Announces Results for

The Third Quarter Ended June 30, 2019

 

 

 

● 

$2.3   million in net income   for the quarter ended June 30, 2019

 

Diluted EPS rose to $0.35 for the quarter ended June 30, 2019  

 

● 

$61.2 million in cash & securities as of June 30, 2019

 

ENGLEWOOD CLIFFS, N.J., August 13, 2019 - Asta Funding, Inc. (NASDAQ: ASFI) (the “Company”), a diversified financial services company, today announced results for the third quarter ended June 30, 2019.

 

Three Months Ended June 30, 2019 Results

 

For the three months ended June 30, 2019, net income was $2.3 million, or $0.35 per diluted share, as compared to net income of $2.0 million, or $0.29 per diluted share for the three months ended June 30, 2018.

 

Total income for the three months ended June 30, 2019 decreased $0.9 million to $6.4 million, compared to $7.3 million for the three months ended June 30, 2018. Total revenue included in the three months ended June 30, 2019 is approximately $3.7 million in total revenue from finance income from the distressed receivable business, as compared to $4.5 million for the three months ended June 30, 2018. Also included in total revenues for the three months ended June 30, 2019 is approximately $0.4 million from personal injury claims income, as compared to $1.6 million for the three months ended June 30, 2018. Disability fee income was $1.2 million for the three months ended June 30, 2019 and 2018. Other income increased $0.8 million to $0.9 million for the three months ended June 30, 2019, compared to $0.1 million for the three months ended June 30, 2018. The Company recognized a gain on settlement of $0.3 million for the three months ended June 30, 2019.

  

General and administrative expenses decreased $1.2 million to $3.0 million for the three months ended June 30, 2019, as compared to $4.2 million for the three months ended June 30, 2018.

 

Additionally, the Company had a loss from an equity method investment of $(5,000) for the three months ended June 30, 2019.

 

Nine Months Ended June 30, 2019 Results

 

For the nine months ended June 30, 2019, net income was $5.4 million, or $0.80 per diluted share, as compared to a net income of $0.3 million, or $0.05 per diluted share for the nine months ended June 30, 2018.

 

Total income for the nine months ended June 30, 2019 decreased $0.4 million to $18.0 million, compared to $18.4 million for the nine months ended June 30, 2018. Total revenue included in the nine months ended June 30, 2019 is approximately $10.7 million in total revenue from finance income from the distressed receivable business, as compared to $12.8 million for the nine months ended June 30, 2018. Also included in total revenues for the nine months ended June 30, 2019 is approximately $1.6 million from personal injury claims income, as compared to $2.2 million for the nine months ended June 30, 2018. Disability fee income was $3.7 million for the nine months ended June 30, 2019, as compared to $3.2 million for the nine months ended June 30, 2018. Other income increased $1.2 million to $1.4 million for the nine months ended June 30, 2019, compared to $0.2 million for the nine months ended June 30, 2018. The Company recognized a gain on settlement of $0.6 million for the nine months ended June 30, 2019.

  

General and administrative expenses decreased $1.4 million to $10.3 million for the nine months ended June 30, 2019, as compared to $11.7 million for the nine months ended June 30, 2018. During the nine months ended June 30, 2018, the Company recorded a loss of $(1.4) million on the acquisition of a minority interest.

 

Additionally, the Company had a loss from an equity method investment of $(91,000) for the nine months ended June 30, 2019, compared to earnings from an equity method investment of $0.8 million for the nine months ended June 30, 2018.

 

Balance Sheet Review

 

As of June 30, 2019, the Company had approximately $61.2 million in cash and cash equivalents, and securities, $89.2 million in stockholders' equity, and a net book value per share of $13.50. 

 

 

 

 

About Asta Funding, Inc.

 

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 three complementary business segments: Personal Injury Claims, Consumer Debt and Disability Advocacy. Founded in 1994 as a sub-prime auto lender, Asta now manages business units that include or have included funding of personal injury claims; acquiring and managing international distressed consumer receivables; and benefits advocacy. For additional information, please visit our website at  http://www.astafunding.com .

 

Cautionary Note Regarding 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, the identified material weaknesses in our internal control over financial reporting and our ability to remediate those material weaknesses, 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, 2018, 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.

 

Investor Contact:

 

Bruce R. Foster, CFO

Asta Funding, Inc.

(201) 567-5648

 

 

 

 

ASTA FUNDING, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

 

   

June 30,
2019

(Unaudited)

   

September 30,
2018

 

ASSETS

               

Cash and cash equivalents

  $ 2,898,000     $ 6,284,000  

Available for sale debt securities (at fair value)

    50,286,000       38,054,000  

Investments in equity securities (at fair value)

    8,032,000        

Consumer receivables acquired for liquidation (at cost)

    2,184,000       3,749,000  

Investment in personal injury claims, net

    5,909,000       10,745,000  

Due from third party collection agencies and attorneys

    813,000       755,000  

Accounts receivable, net

    235,000        

Prepaid and income taxes receivable, net

    4,456,000       5,387,000  

Furniture and equipment, net of accumulated depreciation of $1.9 million at June 30, 2019 and $1.8 million at September 30, 2018

    145,000       100,000  

Equity method investment

    207,000       236,000  

Note receivable

          4,313,000  

Settlement receivable

    1,990,000       3,339,000  

Deferred income taxes

    10,360,000       10,940,000  

Goodwill

    1,410,000       1,410,000  

Other assets

    1,443,000       1,003,000  

Total assets

  $ 90,368,000     $ 86,315,000  

LIABILITIES

               

Accounts payable and accrued expenses

  $ 1,208,000     $ 2,281,000  
                 

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 13,459,708 at June 30, 2019 and September 30, 2018; and outstanding 6,605,915 at June 30, 2019 and 6,685,415 at September 30, 2018

    135,000       135,000  

Additional paid-in capital

    68,558,000       68,551,000  

Retained earnings

    87,956,000       82,441,000  

Accumulated other comprehensive income, net of taxes

    199,000       35,000  

Treasury stock (at cost) 6,853,793 shares at June 30, 2019 and 6,774,293 at September 30, 2018

    (67,688,000

)

    (67,128,000

)

Total stockholders’ equity

    89,160,000       84,034,000  

Total liabilities and stockholders’ equity

  $ 90,368,000     $ 86,315,000  

 

 

 

 

ASTA FUNDING, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited)

 

   

Three Months

   

Three Months

   

Nine Months

   

Nine Months

 
   

Ended

   

Ended

   

Ended

   

Ended

 
   

June 30, 2019

   

June 30, 2018

   

June 30, 2019

   

June 30, 2018

 

Revenues:

                               

Finance income, net

  $ 3,684,000     $ 4,509,000     $ 10,659,000     $ 12,795,000  

Personal injury claims income

    439,000       1,557,000       1,608,000       2,167,000  

Disability fee income

    1,175,000       1,188,000       3,732,000       3,248,000  
                                 

Total revenues

    5,298,000       7,254,000       15,999,000       18,210,000  
                                 

Gain on settlement

    273,000             596,000        

Other income, net

    855,000       76,000       1,395,000       179,000  
                                 
      6,426,000       7,330,000       17,990,000       18,389,000  
                                 

Expenses:

                               

General and administrative

    2,980,000       4,201,000       10,301,000       11,712,000  

Loss on acquisition of minority interest

                      1,420,000  

Interest

          17,000             19,000  

Impairment

    100,000       100,000       100,000       100,000  

Loss (earnings) from equity method investment

    5,000             91,000       (845,000

)

                                 
      3,085,000       4,318,000       10,492,000       12,406,000  
                                 

Income from continuing operations before income tax

    3,341,000       3,012,000       7,498,000       5,983,000  

Income tax expense

    1,037,000       1,055,000       2,146,000       5,595,000  
                                 

Net income from continuing operations

    2,304,000       1,957,000       5,352,000       388,000  

Net loss from discontinued operations, net of income tax

                      (80,000

)

                                 

Net income

  $ 2,304,000     $ 1,957,000     $ 5,352,000     $ 308,000  
                                 

Net income (loss) per basic shares:

                               

Continuing operations

  $ 0.35     $ 0.29     $ 0.80     $ 0.06  

Discontinued operations

                      (0.01

)

    $ 0.35     $ 0.29     $ 0.80     $ 0.05  

Net income (loss) per diluted shares:

                               

Continuing operations

  $ 0.35     $ 0.29     $ 0.80     $ 0.06  

Discontinued operations

                      (0.01

)

    $ 0.35     $ 0.29     $ 0.80     $ 0.05  
                                 

Weighted average number of common shares outstanding:

                               

Basic

    6,666,012       6,685,415       6,678,947       6,654,911  

Diluted

    6,666,231       6,685,628       6,679,260       6,657,840