Asta Funding Inc., a publicly owned debt buyer, Tuesday reported net income of $3.1 million for the fiscal year ended Sept. 30, compared to a net loss of $90.7 million during fiscal year 2009.
Net cash collections from consumer receivables acquired for liquidation totaled $101.9 million for the fiscal year, compared to $147.4 million a year ago - a 30.9% drop. The total includes net cash collections represented by account sales.
The Englewood Cliffs, N.J.-based company buys unpaid consumer and credit card loans and tries to collect them. In fiscal year 2010, Asta Funding purchased portfolios with a face value of $269 million at a cost of $8 million. In fiscal year 2009, the company purchased portfolios with a face value of $577 million at a cost of $19.6 million.
In its fiscal fourth quarter ended Sept. 30, Asta Funding reported a net loss of $5.3 million, compared to a net loss of $79.2 million in the year-ago period. Net cash collections of receivables acquired for liquidation totaled $21 million for Q4, compared to $30.8 million in the year-ago period. Asta Funding recorded a $13 million impairment charge in Q4 related to a February 2007 purchase of a $6.9 billion delinquent credit card portfolio from Great Seneca Financial Corp.
The company paid $300 million for that portfolio.
Asta Funding recorded impairment charges totaling $183.5 million in fiscal year 2009, including $53 million related to the Great Seneca deal. Gary Stern, chairman and CEO at Asta Funding, says that while the latest impairment charge affected Q4 2010 results, the company managed to turn a profit. "We continued our progress in strengthening our balance sheet and maintaining a strong cash position," he says.
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