Asta Funding Reports Swing to Profit in Fiscal Year

ENGLEWOOD CLIFFS, N.J. — Asta Funding, Inc. (Nasdaq: ASFI) (the “Company”), a consumer receivable asset management and liquidation company, today reported its results for the fiscal year and fourth quarter ended September 30, 2010. The Company reported $84.2 million in cash and cash equivalents at September 30, 2010, representing a substantial increase from 2009 and providing the Company the resources it needs to move into fiscal year 2011 without the immediate need for external financing.

Fiscal Year 2010

The Company reported net income of $3,129,000 for the fiscal year ended September 30, 2010, or $0.22 per diluted share, as compared to a net loss of $90,725,000, or $6.36 per share for the fiscal year ended September 30, 2009. Revenues for the fiscal year ended September 30, 2010 were $45,849,000, a decrease of 34.8% as compared to $70,355,000 for the fiscal year ended September 30, 2009.

Net cash collections from collection of consumer receivables acquired for liquidation, including net cash collections represented by account sales, were $101.9 million for the fiscal year ended September 30, 2010, as compared to $147.4 million during fiscal year 2009, a 30.9% decrease from the prior year. Net cash collections represented by account sales were $3.5 million, or 3.4% of net cash collections, in the fiscal year ended September 30, 2010, compared to $8.7 million, or 5.9% in the prior year.

Income from fully amortized portfolios (zero basis revenue) was $34.3 million for the fiscal year ended September 30, 2010, as compared to $40.7 million for the fiscal year ended September 30, 2009. The Company purchased portfolios with a face value of $269 million at a cost of $8.0 million during the fiscal year ended September 30, 2010 as compared to purchases with a face value of $577 million at a cost of $19.6 million during the fiscal year ended September 30, 2009.

General and administrative expenses were $23,211,000 for the fiscal year ended September 30, 2010 as compared to $25,915,000 for the fiscal year ended September 30, 2009, a reduction of approximately 10%. Collection expenses were reduced as a result of certain contractual obligations expiring and the closure of the Pennsylvania collection center in the prior year.

Interest for the fiscal year ended September 30, 2010 was approximately $4,368,000 as compared to $8,452,000 for fiscal year 2009, a 48% reduction, as the Company paid off senior debt in January 2010, reduced non-recourse debt by $13.8 million to $90.5 million, and reduced the subordinated debt — related party by $3,860,000 to $4,386,000 in fiscal year 2010. Cash and cash equivalents at September 30, 2010 were $84.2 million compared to $2.4 million at September 30, 2009.

An impairment charge of $13,029,000 was recorded during fiscal year 2010 as compared to $183,500,000 of impairment charges recorded during the fiscal year 2009.

Fourth Quarter Fiscal Year 2010

The Company reported a net loss of $5,342,000 or $0.37 per share, as compared to a net loss of $79,198,000, or $5.55 per share, for the same period in fiscal year 2009. The Company reported revenues of $11,499,000 for the fourth quarter 2010, as compared to $16,564,000 for the fourth quarter of fiscal year 2009.

Net cash collections of receivables acquired for liquidation, including net cash collections represented by account sales, were $21,033,000 for the fourth quarter of fiscal year 2010, as compared to $30,825,000 for the fourth quarter of fiscal year 2009.

Income from fully amortized portfolios (zero basis revenue) was $8,658,000 for the fourth quarter ended September 30, 2010, compared to $9,563,000 for the comparable period a year ago.

An impairment charge of $13,029,000 was recorded in the fourth quarter of fiscal year 2010 as compared to $137,292,000 in the fourth quarter of fiscal year 2009. The impairment recorded in the fourth quarter of fiscal year 2010, and approximately $53 million of the impairments recorded in the fourth quarter of fiscal year 2009, were related to the Great Seneca Portfolio.

The Company purchased consumer portfolios with a face value of $113.4 million at a cost of $4.7 million during the fourth quarter of fiscal year 2010, compared to purchases of $149.9 million in face value at a cost of $3.1 million during the fourth quarter of fiscal year 2009.

Interest expense for the fourth quarter 2010 was $1,003,000, as compared to $1,545,000 for the comparable period in 2009, as our debt level continues to decline.

During the first quarter of fiscal year 2011, the Company has invested approximately $2. 7 million in portfolio purchases, paid down approximately $2.0 million on the subordinated debt and paid $8.7 million in connection with the extension of the Receivables Financing Agreement with the Bank of Montreal.

Gary Stern, Chairman and CEO of the Company commented, “Although the fourth quarter of fiscal year 2010 was impacted by the impairment charge, we returned to profitability, on an annual basis, during fiscal year 2010. We continued our progress in strengthening our balance sheet and maintaining a strong cash position. As of December 10, 2010, our cash position was approximately $81.0 million, after portfolio purchases of $2.7 million and debt payments of $10.7 million during the first quarter of fiscal year 2011, indicating the Company’s continued strong cash flow. Our strong balance sheet puts us in an excellent position for funding our investment opportunities without the immediate need for external financing. We continue to review all of our investment options in the distressed receivables market and other related markets.”

A conference call to discuss the results of the fiscal year 2010 and the fourth quarter of fiscal year 2010 will be held on Tuesday, December 14, 2010 at 4:00 PM, EST.

Toll-free dial-in number (U.S. and Canada): (800) 668-4132
International dial-in number: (224) 357-2196
Conference ID: 30706662

Conference call will also be available via webcast. Here is the link: http://investor.shareholder.com/media/eventdetail.cfm?eventid=89706&CompanyID=ABEA-58K4IF&e=1&mediaKey=6BC4F784950C3EC9F765AB1AA53FE3BB

Based in Englewood Cliffs, NJ, Asta Funding, Inc., is a leading consumer receivable asset management company that specializes in the purchase, management and liquidation of performing and non-performing consumer receivables. For additional information, please visit our website at http://www.astafunding.com.