Debt buyer Asta Funding Inc. reported flat earnings and revenue May 10 and a drop in cash collections for the fiscal second quarter ended March 31. The Englewood Cliffs, N.J.-based firm also reported spending more on credit card and other debt portfolios during the quarter.
Asta reported net income of $2.85 million for the quarter, down 1.7% from $2.9 million a year earlier. Revenue totaled $11.23 million, up 0.3% from $11.2 million. Cash collections fell 14.7%, to $21.9 million.
Investments in new debt portfolios totaled $2.1 million, up 116% from $971,000. The company noted that it had invested more on performing portfolios, including a semi-performing litigation-related medical accounts portfolio. Since some of the accounts are performing, the cost of the portfolio is higher than the traditional charged-off non-performing assets, which sell for reduced rates.
Spending on portfolios also rose during the six months ended March 31, totaling $5 million, up 51.5% from $3.3 million during the six months ended March 31, 2010.
"We are pleased with the [overall] results as we continue to generate strong cash flow and improve our liquidity position," said Gary Stern, chairman and CEO. "We are also pleased with the quality of the legacy portfolio as we reported an increase in zero basis revenue of 8.5%, to $17.8 million in the first six months of fiscal year 2011 from $16.4 million during the same period of the prior year."
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