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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D. C. 20549
 Form 10-K/A
 Amendment No. 1
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended September 30, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from            to
 Commission file number: 0-26906
 ASTA FUNDING, INC.
 (Exact Name of Registrant Specified in its Charter)
 Delaware(State or other jurisdiction of 
incorporation or organization)
    
    22-3388607(I.R.S. Employer
Identification No).
 210 Sylvan Avenue, Englewood 
Cliffs, NJ(Address of principal executive offices)
    
    07632(Zip Code)
 (201) 567-5648
 None
  Common Stock, par value $.01 per share  (Title of Class)
 o þ
 o þ
 þ o
 o o
 o
  Large accelerated filer oAccelerated filer oNon-accelerated filer þ(Do not check if a smaller reporting company)Smaller reporting company o o þ




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##### 



TABLE OF CONTENTS
 Part IIItem 7.Managements Discussion and Analysis of Financial Condition and Results of Operation.
    
    
    1PART IV
    
    
    13Item 15. Exhibits and Financial Statement Schedules
    
    
    13Signatures
    
    
    14CertificationsEX-31.1EX-31.2EX-32.1EX-32.2




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FORM 10-K/A
TABLE OF CONTENTS
 Explanatory Note
  
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operation.
 Cautions Regarding Forward-Looking Statements
  Overview
  
    
    charged-off receivables accounts that have been
written-off by the originators and may have been
previously serviced by collection agencies;
    
    semi-performing receivables accounts where the debtor
is making partial or irregular monthly payments, but the
accounts may have been written-off by the originators; and
in limited circumstances,
    
    performing receivables accounts where the debtor is
making regular monthly payments that may or may not have
been delinquent in the past.
   
    
    our relationships with industry participants, financial institutions,
collection agencies, investors and our financing sources;
    
    brokers who specialize in the sale of consumer receivable portfolios; and
    
    other sources.
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Critical Accounting Policies
  
    
    The interest method; or
    
    The cost recovery method.
   
    
    same issuer/originator
    
    same underlying credit quality
    
    similar geographic distribution of the accounts
    
    similar age of the receivable and
    
    same type of asset class (credit cards, telecommunications, etc.)
  
    
    the number of collection agencies previously attempting to collect
the receivables in the portfolio;
    
    the average balance of the receivables;
    
    the age of the receivables (as older receivables might be more
difficult to collect or might be less cost effective);
    
    past history of performance of similar assets  as we purchase
portfolios of similar assets, we believe we have built significant
history on how these receivables will liquidate and cash flow;
    
    number of months since charge-off;
    
    payments made since charge-off;
    
    the credit originator and their credit guidelines;
    
    the locations of the debtors as there are better states to attempt
to collect in and ultimately we have better predictability of the
liquidations and the expected cash flows. Conversely, there are
also states where the liquidation rates are not as good and that
is factored into our cash flow analysis;
    
    financial wherewithal of the seller;
    
    jobs or property of the debtors found within portfolios-with our
business model, this is of particular importance. Debtors with
jobs or property are more likely to repay their obligation and
conversely, debtors without jobs or property are less likely to
repay their obligation; and
    
    the ability to obtain customer statements from the original issuer.
 2




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Results of Operations
  Years Ending September 30,2009
    
    
    2008
    
    
    2007Finance income
    
    
    99.8
    %
    
    
    99.8
    %
    
    
    98.4
    %Other income
    
    
    0.2
    %
    
    
    0.2
    %
    
    
    1.6
    %Total revenue
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %General and administrative expenses
    
    
    36.9
    %
    
    
    25.6
    %
    
    
    18.1
    %Interest expense
    
    
    12.0
    %
    
    
    15.5
    %
    
    
    13.0
    %Impairments
    
    
    261.1
    %
    
    
    46.0
    %
    
    
    6.5
    %(Loss) income before equity in
earnings in venture and income taxes
    
    
    (210.0
    )%
    
    
    12.9
    %
    
    
    62.4
    %Equity in earnings in venture
    
    
    0.1
    %
    
    
    0
    %
    
    
    0.2
    %(Loss) income before income taxes
    
    
    (209.9
    )%
    
    
    12.9
    %
    
    
    62.6
    %Provision for income taxes
    
    
    (80.8
    )%
    
    
    5.3
    %
    
    
    25.4
    %Net (loss) income
    
    
    (129.1
    )%
    
    
    7.6
    %
    
    
    37.2
    %
 3




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Year Ended September 30, 2009 Compared to the Year Ended September 30, 2008
 Finance income.
  $ $
 Other income.
 General and administrative expenses.
 Interest expense.
 Impairments.
 Income tax (benefit) expense
 4




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Net (loss) income.
 Year Ended September 30, 2008 Compared to the Year Ended September 30, 2007
 Finance income.
   Other income.
 General and administrative expenses.
 5




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Interest expense.
 Impairments.
 Equity in earnings of venture.
 Net income.
 Liquidity and Capital Resources
     6




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7




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Year Ended September 30,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(In millions)Balance at beginning of period
    
    $
    449.0
    
    
    $
    545.6
    
    
    $
    257.3
    
    
    $
    172.7
    
    
    $
    146.1Acquisitions of finance
receivables, net of buybacks
    
    
    19.6
    
    
    
    49.9
    
    
    
    440.9
    
    
    
    200.2
    
    
    
    126.0Cash collections from debtors
applied to principal(1)(2)
    
    
    (69.1
    )
    
    
    (81.7
    )
    
    
    (114.4
    )
    
    
    (90.4
    )
    
    
    (59.6
    )Cash collections represented by
account sales applied to
principal(1)
    
    
    (8.1
    )
    
    
    (11.0
    )
    
    
    (29.1
    )
    
    
    (23.0
    )
    
    
    (39.8
    )Impairments/Portfolio write down
    
    
    (183.5
    )
    
    
    (53.2
    )
    
    
    (9.1
    )
    
    
    (2.2
    )
    
    
    Effect of foreign exchange
    
    
    0.4
    
    
    
    (0.6
    )
    
    
    
    
    
    
    
    
    
    
    Balance at end of period
    
    $
    208.3
    
    
    $
    449.0
    
    
    $
    545.6
    
    
    $
    257.3
    
    
    $
    172.7
 
 (1)
    
    Cash collections applied to principal consists of cash collections less income recognized on
finance receivables plus amounts received by us from the sale of consumer receivable portfolios to
third parties.(2)
    
    In 2007, includes put backs of purchased accounts returned to the seller totaling $5.5 million.
Supplementary Information on Consumer Receivables Portfolios: Portfolio Purchases
 Year Ended September 30,2009
    
    2008
    
    2007(In millions)Aggregate Purchase Price
    
    $
    19.6
    
    
    $
    49.9
    
    
    $
    440.9Aggregate Portfolio Face Amount
    
    
    577.0
    
    
    
    1,605.1
    
    
    
    10,891.9
  8




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Schedule of Portfolios by Income Recognition Category
 September 30, 2009
    
    September 30, 2008
    
    September 30, 2007Cost
    
    Interest
    
    Cost
    
    Interest
    
    Cost
    
    InterestRecovery
    
    Method
    
    Recovery
    
    Method
    
    Recovery
    
    MethodPortfolios
    
    Portfolios
    
    Portfolios
    
    Portfolios
    
    Portfolios
    
    Portfolios(In millions)Original
Purchase Price (at
period end)
    
    $
    442.2
    
    
    $
    772.8
    
    
    $
    405.9
    
    
    $
    789.5
    
    
    $
    101.1
    
    
    $
    1,045.4Cumulative
Aggregate Managed
Portfolios (at
period end)
    
    
    13,884.5
    
    
    
    17,725.9
    
    
    
    12,053.4
    
    
    
    18,980.0
    
    
    
    3,961.5
    
    
    
    25,464.7Receivable Carrying
Value (at period
end)
    
    
    137.6
    
    
    
    70.6
    
    
    
    245.5
    
    
    
    203.5
    
    
    
    32.0
    
    
    
    513.6Finance Income
Earned (for the
respective period)
    
    
    2.5
    
    
    
    67.7
    
    
    
    1.2
    
    
    
    114.0
    
    
    
    2.2
    
    
    
    136.2Total Cash Flows
(for the respective
period)
    
    
    47.0
    
    
    
    100.4
    
    
    
    24.9
    
    
    
    183.0
    
    
    
    21.2
    
    
    
    260.6
  Collections Represented by Account Sales
 CollectionsRepresented
    
    FinanceBy account
    
    IncomeYear
    
    Sales
    
    Recognized2009
    
    $
    8,662,000
    
    
    $
    3,085,0002008
    
    
    20,395,000
    
    
    
    9,361,0002007
    
    
    54,193,000
    
    
    
    25,164,000
 9




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Portfolio Performance (1)
  TotalNet Cash
    
    
    
    
    
    
    
    
    
    EstimatedCollections
    
    Estimated
    
    Total
    
    CollectionsPurchase
    
    Purchase
    
    Including
    
    Remaining
    
    Estimated
    
    as a PercentagePeriod
    
    Price(2)
    
    Cash Sales(3)
    
    Collections(4)
    
    Collections(5)
    
    of Purchase Price2001
    
    $
    65,120,000
    
    
    $
    105,453,000
    
    
    $
    
    
    
    $
    105,453,000
    
    
    
    162
    %2002
    
    
    36,557,000
    
    
    
    48,014,000
    
    
    
    
    
    
    
    48,014,000
    
    
    
    131
    %2003
    
    
    115,626,000
    
    
    
    210,815,000
    
    
    
    1,392,000
    
    
    
    212,207,000
    
    
    
    184
    %2004
    
    
    103,743,000
    
    
    
    179,189,000
    
    
    
    682,000
    
    
    
    179,871,000
    
    
    
    173
    %2005
    
    
    126,023,000
    
    
    
    202,045,000
    
    
    
    10,931,000
    
    
    
    212,976,000
    
    
    
    169
    %2006(6)
    
    
    163,392,000
    
    
    
    230,765,000
    
    
    
    22,479,000
    
    
    
    253,244,000
    
    
    
    155
    %2007(7)
    
    
    109,235,000
    
    
    
    77,483,000
    
    
    
    37,865,000
    
    
    
    115,348,000
    
    
    
    106
    %2008
    
    
    26,626,000
    
    
    
    28,851,000
    
    
    
    3,936,000
    
    
    
    32,787,000
    
    
    
    123
    %2009
    
    
    19,129,000
    
    
    
    6,376,000
    
    
    
    19,240,000
    
    
    
    25,616,000
    
    
    
    134
    %
 
 (1)
    
    Total collections do not represent full collections of the Company with
respect to this or any other year.(2)
    
    Purchase price refers to the cash paid to a seller to acquire a portfolio
less the purchase price refunded by a seller due to the return of
non-compliant accounts (also defined as put-backs), plus third party
commissions(3)
    
    Cash collections include: net collections from our third-party collection
agencies and attorneys, collections from our in-house efforts and collections
represented by account sales.(4)
    
    Does not include estimated collections from portfolios that are zero basis(5)
    
    Total estimated collections refer to the actual net cash collections,
including cash sales, plus estimated remaining collections.(6)
    
    Four portfolios purchased in 2006 with an aggregate purchase price of
$36,845,000 were reclassified from the interest method to the cost recovery
method during fiscal year 2009. The following table describes the impact of
the reclassification on the year 2007: TotalNet Cash
    
    
    
    
    
    
    
    
    
    
    EstimatedCollections
    
    
    Estimated
    
    
    Total
    
    
    CollectionsPurchase
    
    
    Including
    
    
    Remaining
    
    
    Estimated
    
    
    as a PercentagePrice
    
    
    Cash Sales
    
    
    Collections
    
    
    Collections
    
    
    of Purchase PriceAs reported 2007
    
    $
    200,237,000
    
    
    $
    149,368,000
    
    
    $
    160,913,000
    
    
    $
    310,281,000
    
    
    
    155
    %Less: Portfolio purchases
transferred to cost recovery method
in 2009
    
    
    (36,845,000
    )
    
    
    (15,112,000
    )
    
    
    (34,539,000
    )
    
    
    (49,651,000
    )
    
    
    (135
    )%Interest method Portfolios
    
    $
    163,392,000
    
    
    $
    134,256,000
    
    
    $
    126,374,000
    
    
    $
    260,630,000
    
    
    
    160
    %2008 and 2009 Activity
    
    
    
    
    
    
    96,509,000
    
    
    
    (103,895,000
    )
    
    
    (7,386,000
    )As reported 2009
    
    $
    163,392,000
    
    
    $
    230,765,000
    
    
    $
    22,479,000
    
    
    $
    253,244,000
    
    
    
    155
    %
 
 (7)
    
    The Portfolio Purchase was reclassified from the interest method to the cost recovery method during the third quarter of fiscal year 2008 The following table
describes the impact of the reclassification on the year 2007: 10




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TotalNet Cash
    
    
    
    
    
    
    
    
    
    
    EstimatedCollections
    
    
    Estimated
    
    
    Total
    
    
    CollectionsPurchase
    
    
    Including
    
    
    Remaining
    
    
    Estimated
    
    
    as a PercentagePrice
    
    
    Cash Sales
    
    
    Collections
    
    
    Collections
    
    
    of Purchase PriceAs reported 2007
    
    $
    384,850,000
    
    
    $
    69,409,000
    
    
    $
    460,205,000
    
    
    $
    529,614,000
    
    
    
    138
    %Less: Portfolio
Purchase
    
    
    (275,615,000
    )
    
    
    (45,499,000
    )
    
    
    (334,701,000
    )
    
    
    (380,200,000
    )
    
    
    (138
    )%Interest method
Portfolios without
Portfolio
Purchase-2007
    
    $
    109,235,000
    
    
    $
    23,910,000
    
    
    $
    125,504,000
    
    
    $
    149,414,000
    
    
    
    137
    %2008 and 2009
Activity
    
    
    
    
    
    
    53,573,000
    
    
    
    (87,639,000
    )
    
    
    (34,066,000
    )As reported 2008
    
    $
    109,235,000
    
    
    $
    77,483,000
    
    
    $
    37,865,000
    
    
    $
    115,348,000
    
    
    
    106
    %
   New Accounting Pronouncements
     11




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Inflation
  Seasonality and Trends
  12




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Part IV
 
 Item 15. Exhibits, Financial Statement Schedules.
    2. Exhibits
 ExhibitNumber31.1
    
    Certification of Registrants Chief Executive Officer,
Gary Stern, pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Registrants Chief Financial Officer,
Robert J. Michel, pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1
    
    Certification of the Registrants Chief Executive
Officer, Gary Stern, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.32.2
    
    Certification of the Registrants Chief Financial
Officer, Robert J. Michel, pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
 13




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SIGNATURES
  ASTA FUNDING, INC.By:
    /s/ Gary SternGary SternChairman, President and Chief Executive Officer (Principal
Executive Officer)Dated: January 28, 2010  Signature
    
    Title
    
    Date/s/ Gary Stern
 Gary
Stern
    
    Chairman, President, Chief
Executive Officer and
Director
    
    January 28, 2010/s/ Robert J. Michel
 Robert
J. Michel
    
    Chief Financial Officer
Principal Financial and
Accounting Officer
    
    January 28, 2010/s/ Arthur Stern
 Arthur
Stern
    
    Chairman Emeritus and Director
    
    January 28, 2010/s/ Herman Badillo
 Herman
Badillo
    
    Director
    
    January 28, 2010/s/ Edward Celano
 Edward
Celano
    
    Director
    
    January 28, 2010/s/ Harvey Leibowitz
 Harvey
Leibowitz
    
    Director
    
    January 28, 2010/s/ David Slackman
 David
Slackman
    
    Director
    
    January 28, 2010/s/ Louis A. Piccolo
 Louis
A. Piccolo
    
    Director
    
    January 28, 2010
 14