Velocity Asset Management Reports Q2 Results

Wall, N.J.-based Velocity Asset Management, Inc. (AMEX: JVI), which collects delinquent consumer receivables using an outsourced litigation model, today announced operating results for the three- and six-month periods ended June 30, 2008.

Velocity’s Q2 2008 revenue grew 11 percent as the Company’s outsourced litigation collection model continued to perform on-plan. Velocity reported Q2 ‘08 operating income increased 7% to $1.6 million and income from continuing operations rose 2% to $751,000, versus Q2 2007. Reflecting a higher tax provision of $580,000 (43.6%) in Q2 ’08 vs. $370,000 (33.4%) in Q2 ‘07 and a loss from discontinued operations of $452,000, primarily due to a $400,000 impairment charge in connection with a Florida investment property, Velocity reported a Q2 net loss attributable to common shareholders of $47,000, or $0.01 per diluted share, compared to net income of $301,000, or $0.02 per diluted share, in the prior year period.

“In the face of challenging capital markets and concern about the consumer economy, Velocity’s disciplined collections model continued to perform according to expectations during the 2008 second quarter,” stated Velocity President and CEO Jack Kleinert. “Despite an improved operating performance in our core Velocity Investments business, our Q2 results were adversely impacted by a loss from discontinued operations as a result of an impairment charge on a Florida investment property and a higher income tax provision.

“As we have indicated in recent quarters, it continues to be a very attractive environment for acquiring charged-off receivables. In order to pursue these opportunities and support the growth of our portfolio, we issued Subordinated Notes in the aggregate principal amount of $700,000 in a private placement offering, and secured approximately $794,000 in net proceeds from a private placement of Units during the period.

“We deployed some of the aforementioned proceeds by purchasing five new charged-off consumer receivables portfolios aggregating approximately $13.9 million of initial outstanding amount. In aggregate, Velocity has acquired 89 portfolios with an initial outstanding amount of approximately $500 million since inception,” concluded Mr. Kleinert.

As of June 30, 2008, the Company had $11.6 million outstanding, and $10.9 million in availability on its $22.5 million senior credit facility with Wells Fargo Foothill, Inc.

Velocity Asset Management continues to wind-down the discontinued operations of its J. Holder and VOM subsidiaries and expects to complete this process by the end of 2008. These divestitures should free up additional capital and allow management to focus exclusively on its core, consumer receivables business, Velocity Investments.

About Velocity Asset Management, Inc.
Velocity Asset Management, Inc., through its wholly owned subsidiary, Velocity Investments, LLC, is focused on the purchase and collection of distressed consumer receivables, principally through an outsourced litigation model. The Company purchases consumer receivable portfolios that are of “litigation quality.” By focusing on the quality of the portfolio prior to purchase, Velocity aims to diminish its risk and improve its overall collection rate as a percentage of principal balance. For more information, visit www.velocitycollect.com.