Asta Funding Inc. (ASFI, Financial) filed Quarterly Report for the period ended 2012-06-30.
Asta Funding, Inc. has a market cap of $134.3 million; its shares were traded at around $9.42 with a P/E ratio of 11.9 and P/S ratio of 3.1. The dividend yield of Asta Funding, Inc. stocks is 0.9%.
Finance income. For the three month period ended June 30, 2012, finance income was $10.5 million as compared to $11.1 million for the three month period ended June 30, 2011. The decrease is due to reduced portfolio purchases in recent years, partially offset by increased zero basis revenue. Zero basis revenue was $9.6 million and $9.1 million for the three months ended June 30, 2012 and 2011, respectively. The Company purchased $4.1 million in face value of portfolios at a cost of $1.8 million in the third quarter of fiscal year 2011. No portfolios were purchased during the third quarter of fiscal year 2012.
The rights, duties and obligations with respect to Pegasus are set forth in an Operating Agreement (the Operating Agreement), which provides, among other things, that all profits and losses of Pegasus will be allocated to our subsidiary on a pro rata basis in accordance with their respective ownership interests, subject to certain exceptions including the repayment of the loan made to Pegasus by Fund Pegasus prior to the distribution of profits. We have agreed, among other things, to guarantee the funding obligations of Fund Pegasus to Pegasus. The Operating Agreement also provides that Fund Pegasus has the right to suspend financing to Pegasus, and we have the right to terminate the Operating Agreement, if there is a material change in the applicable laws or case law affecting Pegasuss business. In addition, if returns for any consecutive twelve month period after the first year of operations do not exceed 15%, we may terminate the Operating Agreement without penalty. If we enter into new personal injury claim funding ventures in the future, PLF shall have the right to participate in such ventures by purchasing up to 20% of the equity in such ventures.
We are initially investing up to $15 million in the venture to fund divorce cases, consisting of three tranches of $5 million. At our option, we may invest additional funds, provided that the first $35 million in additional investment must be provided in tranches of $10 million, $10 million, and $15 million, respectively. We are entitled to a 15% cash-on-cash return in each particular tranche. If the venture is unable to provide the 15% preferred return to us on any initial $5 million tranche, BPCMs profit and loss distribution will be adjusted from the current 60% and 40% split to provide us with the equivalent of a 15% preferred return, if possible.
We do not anticipate collecting the majority of the purchased principal amounts. Accordingly, the difference between the carrying value of the portfolios and the gross receivables is not indicative of future revenues from these accounts acquired for liquidation. Since we purchased these accounts at significant discounts, we anticipate collecting only a small portion of the face amounts. During the nine months ended June 30, 2012, we purchased portfolios with a face value of $6.0 million for an aggregate purchase price of $2.7 million.
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Asta Funding, Inc. has a market cap of $134.3 million; its shares were traded at around $9.42 with a P/E ratio of 11.9 and P/S ratio of 3.1. The dividend yield of Asta Funding, Inc. stocks is 0.9%.
Highlight of Business Operations:
Finance income. For the nine month period ended June 30, 2012, finance income decreased $2.3 million, or 7.0%, to $30.8 million from $33.1 million for the nine month period ended June 30, 2011. The decrease is due to reduced portfolio purchases in recent years, partially offset by increased zero basis revenue (income recognized from fully amortized portfolios.) Zero basis revenue increased slightly to $27.8 million for the nine month period ended June 30, 2012, as compared to $26.9 million for the nine months ended June 30, 2011. We purchased $6.0 million in face value of new portfolios at a cost of $2.7 million in the first nine months of fiscal year 2012 as compared to purchased $17.8 million in face value at a cost of $6.8 million, in the same prior year period.Finance income. For the three month period ended June 30, 2012, finance income was $10.5 million as compared to $11.1 million for the three month period ended June 30, 2011. The decrease is due to reduced portfolio purchases in recent years, partially offset by increased zero basis revenue. Zero basis revenue was $9.6 million and $9.1 million for the three months ended June 30, 2012 and 2011, respectively. The Company purchased $4.1 million in face value of portfolios at a cost of $1.8 million in the third quarter of fiscal year 2011. No portfolios were purchased during the third quarter of fiscal year 2012.
The rights, duties and obligations with respect to Pegasus are set forth in an Operating Agreement (the Operating Agreement), which provides, among other things, that all profits and losses of Pegasus will be allocated to our subsidiary on a pro rata basis in accordance with their respective ownership interests, subject to certain exceptions including the repayment of the loan made to Pegasus by Fund Pegasus prior to the distribution of profits. We have agreed, among other things, to guarantee the funding obligations of Fund Pegasus to Pegasus. The Operating Agreement also provides that Fund Pegasus has the right to suspend financing to Pegasus, and we have the right to terminate the Operating Agreement, if there is a material change in the applicable laws or case law affecting Pegasuss business. In addition, if returns for any consecutive twelve month period after the first year of operations do not exceed 15%, we may terminate the Operating Agreement without penalty. If we enter into new personal injury claim funding ventures in the future, PLF shall have the right to participate in such ventures by purchasing up to 20% of the equity in such ventures.
We are initially investing up to $15 million in the venture to fund divorce cases, consisting of three tranches of $5 million. At our option, we may invest additional funds, provided that the first $35 million in additional investment must be provided in tranches of $10 million, $10 million, and $15 million, respectively. We are entitled to a 15% cash-on-cash return in each particular tranche. If the venture is unable to provide the 15% preferred return to us on any initial $5 million tranche, BPCMs profit and loss distribution will be adjusted from the current 60% and 40% split to provide us with the equivalent of a 15% preferred return, if possible.
We do not anticipate collecting the majority of the purchased principal amounts. Accordingly, the difference between the carrying value of the portfolios and the gross receivables is not indicative of future revenues from these accounts acquired for liquidation. Since we purchased these accounts at significant discounts, we anticipate collecting only a small portion of the face amounts. During the nine months ended June 30, 2012, we purchased portfolios with a face value of $6.0 million for an aggregate purchase price of $2.7 million.
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