Cash America Announces Third Quarter Earnings up 19% and Dividend Declared
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FORT WORTH, Texas--(BUSINESS WIRE)-- Cash America International, Inc. (NYSE: CSH) announced today that net income attributable to the Company for the third quarter of 2009 increased 19% to $22,478,000 (73 cents per share) compared to the third quarter of 2008 which was $18,925,000 (63 cents per share).
Total revenue increased 10% during the third quarter 2009 to $276.1 million, up from $252.2 million during the same period in 2008. Contributing to the rise in total revenue was a 28% increase in finance and service charges from pawn loans and an increase of 9% in the proceeds from the sale of merchandise during the quarter. This was driven by continued customer demand for pawn lending products and the addition of Prenda Facil in December 2008, the Company's Mexico based pawn lending operation. Excluding Prenda Facil, the Company reported an 11% increase in finance and service charges from pawn loans during the quarter. Consolidated pawn loan balances increased year-over-year by 20% during the third quarter 2009. Excluding the addition of Prenda Facil, pawn loan balances were up 6% during the period. Consolidated income from operations rose 14% to $41.4 million during the third quarter 2009, up from $36.2 million during the same period in 2008. This is partially due to lower loan losses on cash advances written. Loan losses as a percent of cash advance fees decreased to 38.4% in the third quarter of 2009 compared to 42.5% in the third quarter of 2008.
For the nine-month period ended September 30, 2009, Cash America produced net income of $62,995,000 ($2.06 per share) compared to $64,873,000 ($2.16 per share) for the same period in 2008. The decrease in net income was due to a 4% decrease in cash advance fees during the nine-month period which is largely related to the absence of or significantly reduced profitability in certain cash advance markets in 2009 that generated revenue and earnings for the Company in 2008. Total revenue increased 6% to $796.6 million for the nine-month period ended September 30, 2009, up from $751.1 million for the same period in 2008.
Commenting on the results for the third quarter, Daniel R. Feehan, President and Chief Executive Officer said, "We have restored the year over year quarterly earnings growth that challenged us in the first half of 2009 due to changes in certain markets for our cash advance product. Our pawn lending activities have continued to produce earnings growth throughout 2009 and in the third quarter we were able to add year over year growth in our cash advance business segment as our storefront business posted a successful third quarter." Mr. Feehan added, "We are proud to have posted this earnings growth while adding 158 net new pawn lending locations, including 113 acquired locations and 49 start-up locations while closing 4 locations, in an effort to expand the concentration of our pawn lending activities over the last twelve months."
Cash America will conduct a conference call to discuss its third quarter earnings Thursday, October 22, 2009 at 7:45 AM CDT. A live web cast of the call will be available on the Company's corporate web site in the Investor Relations section (www.cashamerica.com). To listen to the live call, please go to the web site at least fifteen minutes early to register, download, and install any necessary audio software.
Additionally, the Company announced that the Board of Directors, at its regularly scheduled quarterly meeting, declared a $0.035 (3.5 cents) per share cash dividend on common stock outstanding. The dividend will be paid at the close of business on November 18, 2009 to shareholders of record on November 4, 2009.
Outlook for the Fourth Quarter of 2009 and 2010 Fiscal Year
Expectations for the remainder of fiscal 2009 will be impacted by earning asset levels based on customer demand for credit products and by customer demand for the sale of merchandise in pawn lending locations. The fourth quarter represents an important period of retail sales for the Company, and results will be affected by consumer sentiments during the period. Based on its views and expectations related to the preceding factors management expects that the fourth quarter 2009 net income per share will be between 94 cents and $1.02 per share compared to 54 cents per share in the fourth quarter of 2008. The fourth quarter of 2008 included 20 cents of one-time charges, which included severance and related expenses for the closing of 42 cash advance locations, the restructuring and elimination of senior management positions, referendum initiatives related to the November 4, 2008 election in the state of Ohio and new product transition costs in certain cash advance markets . Therefore, management's expectation for the full year 2009 earnings per share will be between $3.00 and $3.08 compared to $2.70 per share in fiscal 2008.
In addition, management is initiating its preliminary expectations for fiscal year 2010. Based on its current views of the coming year, management establishes its initial anticipated range of earnings per share of $3.45 to $3.60 for fiscal 2010.
About the Company
As of September 30, 2009, Cash America International, Inc. had 1,034 total locations offering specialty financial services to consumers, including 660 pawn lending locations (including 15 unconsolidated franchised locations), consisting of 503 locations operating in 22 states in the United States under the names "Cash America Pawn" and "SuperPawn" and 157 pawn lending locations, of which the Company is a majority owner, operating in 19 jurisdictions in central and southern Mexico under the name "Prenda Facil." In addition, as of September 30, 2009, the Company had 248 cash advance storefront locations operating in six states in the United States under the names "Cash America Payday Advance" and "Cashland" and 121 unconsolidated franchised and five Company-owned check cashing centers operating in 16 states in the United States under the name "Mr. Payroll." Additionally, as of September 30, 2009, the Company offered short-term cash advances over the Internet to customers in 32 states in the United States at http://www.cashnetusa.com, in the United Kingdom at http://www.quickquid.co.uk and in Australia at http://www.dollarsdirect.com.au. The Company also owns a card services business that processes cash advances on behalf of a third-party lender with balances outstanding in all 50 states and one other United States territory as of September 30, 2009.
For additional information regarding the Company and the services it provides, visit the Company's websites located at:
http://www.cashamerica.com http://www.cashnetusa.com http://www.quickquid.co.uk http://www.dollarsdirect.com.au http://www.strikegoldnow.com http://www.cashlandloans.com
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This release contains forward-looking statements about the business, financial condition and prospects of Cash America International, Inc. and its subsidiaries (the "Company"). The actual results of the Company could differ materially from those indicated by the forward-looking statements because of various risks and uncertainties including, without limitation, changes in pawn, consumer credit, tax and other laws and governmental rules and regulations applicable to the Company's business, changes in demand for the Company's services, the continued acceptance of the online distribution channel by the Company's cash advance customers, the actions of third parties who offer products and services to or for the Company, fluctuations in the price of gold, changes in competition, the ability of the Company to open new operating units in accordance with its plans, changes in economic conditions, real estate market fluctuations, interest rate fluctuations, changes in foreign currency exchange rates, changes in the capital markets, the ability to successfully integrate newly acquired businesses into the Company's operations, the loss of services of any of our executive officers, the effect of any current or future litigation proceedings on the Company, acts of God, war or terrorism, pandemics and other events, the effect of any of such changes on the Company's business or the markets in which we operate and other risks and uncertainties indicated in the Company's filings with the Securities and Exchange Commission. These risks and uncertainties are beyond the ability of the Company to control, nor can the Company predict, in many cases, all of the risks and uncertainties that could cause its actual results to differ materially from those indicated by the forward-looking statements. When used in this release, terms such as "believes," "estimates," "should," "could," "would," "plans," "expects," "anticipates," "may," "forecasts," "projects" and similar expressions and variations as they relate to the Company or its management are intended to identify forward-looking statements. The Company disclaims any intention or obligation to update or revise any forward-looking statements to reflect events or circumstances occurring after the date of this release.
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
HIGHLIGHTS OF CONSOLIDATED RESULTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Consolidated Operations:
Total revenue $ 276,124 $ 252,150 $ 796,596 $ 751,063
Net revenue 200,582 184,117 567,018 544,773
Total operating expenses 159,152 147,926 449,910 428,216
Income from operations $ 41,430 $ 36,191 $ 117,108 $ 116,557
Income before income taxes 35,851 32,007 101,524 105,695
Net Income $ 22,748 $ 18,925 $ 63,792 $ 64,873
Less: Net income attributable to (270 ) - $ (797 ) $ -
the noncontrolling interest
Net Income Attributable to Cash $ 22,478 $ 18,925 $ 62,995 $ 64,873
America International, Inc.
Earnings per share:
Net Income attributable to Cash
America International, Inc.
common stockholders:
Basic $ 0.76 $ 0.65 $ 2.12 $ 2.21
Diluted $ 0.73 $ 0.63 $ 2.06 $ 2.16
Weighted average shares:
Basic 29,702 29,266 29,757 29,321
Diluted 30,698 30,035 30,524 30,082
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
September 30, December 31,
2009 2008 2008
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 28,532 $ 29,754 $ 30,005
Pawn loans 190,478 158,226 168,747
Cash advances, net 93,472 87,034 83,850
Merchandise held for disposition, 116,890 111,053 109,493
net
Finance and service charges 36,228 29,658 33,063
receivable
Income taxes recoverable - 1,306 2,606
Other receivables and prepaid 21,155 13,658 15,480
expenses
Deferred tax assets 23,894 22,088 22,037
Total current assets 510,649 452,777 465,281
Property and equipment, net 188,363 181,524 185,887
Goodwill 493,384 420,840 494,192
Intangible assets, net 28,787 21,634 35,428
Other assets 7,829 3,501 5,722
Total assets $ 1,229,012 $ 1,080,276 $ 1,186,510
Liabilities and Equity
Current liabilities:
Accounts payable and accrued $ 73,804 $ 66,414 $ 79,759
expenses
Accrued supplemental acquisition - 69,499 47,064
payment
Customer deposits 9,547 8,754 8,814
Income taxes currently payable 5,258 - -
Current portion of long-term debt 17,512 8,500 15,810
Total current liabilities 106,121 153,167 151,447
Deferred tax liabilities 40,103 25,826 27,575
Noncurrent income tax payable 4,051 - 3,050
Other liabilities 3,929 2,202 2,359
Long-term debt 429,096 343,692 422,344
Total liabilities 583,300 $ 524,887 $ 606,775
Equity:
Cash America International, Inc.
equity:
Common stock, $.10 par value per
share, 80,000,000 shares 3,024 3,024 3,024
authorized, 30,235,164 shares
issued
Additional paid-in capital 166,278 163,678 160,007
Retained earnings 500,150 424,999 440,252
Accumulated other comprehensive (1,607 ) (59 ) (3,964 )
loss
Treasury shares, at cost (965,371
shares, 1,218,075 shares and
818,772 shares at September 30, (27,759 ) (36,253 ) (24,278 )
2009 and 2008 at December 31, 2008,
respectively
Total Cash America International, 640,086 555,389 575,041
Inc. stockholders' equity
Noncontrolling interest 5,626 - 4,694
Total equity 645,712 555,389 579,735
Total liabilities and equity $ 1,229,012 $ 1,080,276 $ 1,186,510
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
(Unaudited)
Revenue
Finance and service charges $ 59,920 $ 46,977 $ 167,159 $ 133,788
Proceeds from disposition of 114,786 105,517 354,719 330,189
merchandise
Cash advance fees 98,209 96,301 263,119 274,610
Check cashing fees, 3,209 3,355 11,599 12,476
royalties and other
Total Revenue 276,124 252,150 796,596 751,063
Cost of Revenue
Disposed merchandise 75,542 68,033 229,578 206,290
Net Revenue 200,582 184,117 567,018 544,773
Expenses
Operations 89,368 82,319 261,284 243,553
Cash advance loss provision 37,690 40,950 91,642 102,817
Administration 21,875 15,359 66,031 53,890
Depreciation and 10,219 9,298 30,953 27,956
amortization
Total Expenses 159,152 147,926 449,910 428,216
Income from Operations 41,430 36,191 117,108 116,557
Interest expense (5,436 ) (4,292 ) (15,591 ) (11,005 )
Interest income 7 113 26 220
Foreign currency transaction (150 ) (5 ) (19 ) (77 )
gain (loss)
Income before Income Taxes 35,851 32,007 101,524 105,695
Provision for income taxes 13,103 13,082 37,732 40,822
Net Income 22,748 18,925 63,792 64,873
Less: Net income
attributable to the (270 ) - (797 ) -
noncontrolling interest
Net Income Attributable to
Cash America International, $ 22,478 $ 18,925 $ 62,995 $ 64,873
Inc.
Earnings Per Share:
Net Income attributable to
Cash America International,
Inc. common stockholders:
Basic $ 0.76 $ 0.65 $ 2.12 $ 2.21
Diluted $ 0.73 $ 0.63 $ 2.06 $ 2.16
Weighted average common
shares outstanding:
Basic 29,702 29,266 29,757 29,321
Diluted 30,698 30,035 30,524 30,082
Dividends declared per $ 0.035 $ 0.035 $ 0.105 $ 0.105
common share
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
FINANCIAL AND OPERATING DATA
(in thousands, except per share data)
Three Months Ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
Location statistics
Pawn segment locations in operation -(e)
Beginning of period, owned 632 487 598 485
Acquired - - 1 1
Start-ups 16 - 49 1
Combined or closed (3 ) - (3 ) -
End of period, owned 645 487 645 487
Franchise locations at end of period (a) 15 15 15 15
Total pawn lending location locations at 660 502 660 502
end of period (a) (e)
Average number of owned pawn lending 641 487 622 486
location locations (a) (e)
Cash advance segment locations in
operation (excludes online lending and
card services) -
Beginning of period 248 292 248 304
Combined or closed - (2 ) - (14 )
End of period 248 290 248 290
Average number of cash advance locations 248 291 248 298
Check cashing segment locations -
Company-owned locations at end of period 5 5 5 5
Franchised locations at end of period (a) 121 129 121 129
Total check cashing centers in operation 126 134 126 134
at end of period (a)
Combined total of all locations at end of 1034 926 1034 926
period (a)
Services offered by locations
Pawn lending -
Pawn lending segment:
Domestic 488 487 488 487
Foreign (e) 157 - 157 -
Franchise - domestic (a) 15 15 15 15
Combined pawn lending segment (e) 660 502 660 502
Cash advance segment - storefront 116 - 116 -
operations
Total locations offering pawn lending (a) 776 502 776 502
(e)
Cash advances -
Cash advance segment - storefront 248 290 248 290
operations
Pawn lending segment - domestic 432 432 432 432
Total locations offering cash advances 680 722 680 722
Check cashing -
Check cashing segment
Company-owned locations 5 5 5 5
Franchised locations (a) 121 129 121 129
Total check cashing segment (a) 126 134 126 134
Cash advance segment - storefront 248 290 248 290
operations
Pawn lending segment - domestic 383 399 383 399
Total locations offering check cashing 757 823 757 823
(a)
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
FINANCIAL AND OPERATING DATA
(in thousands, except per share data)
Three Months Ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
Market coverage
Market coverage for pawn
lending segment at end of
period
States in the U.S. 22 22 22 22
Foreign countries (e) 1 - 1 -
Market coverage for cash
advance segment at end of
period(c)
States and other U.S.
territories
Storefront 6 7 6 7
Online 32 33 32 33
Card services 51 51 51 51
Foreign countries
Online 2 1 2 1
Pawn Lending Activities(f)
Annualized yield on pawn
loans -
Pawn lending segment:
Domestic 127.7 % 123.9 % 131.1 % 128.2 %
Foreign (e) 141.0 % - % 147.8 % - %
Combined pawn lending 129.2 % 123.9 % 133.0 % 128.2 %
segment (e)
Cash advance segment - 74.9 % - % 85.0 % - %
storefront operations
Combined annualized yield on 128.9 % 123.9 % 132.8 % 128.2 %
pawn loans (e)
Amount of pawn loans written
and renewed -
Pawn lending segment:
Domestic $ 170,059 $ 161,225 $ 465,179 $ 442,553
Foreign (e) 29,633 - 72,776 -
Combined pawn lending $ 199,692 $ 161,225 $ 537,955 $ 442,553
segment (e)
Cash advance segment - 1,421 - 2,654 -
storefront operations
Combined amount of pawn
loans written and renewed $ 201,113 $ 161,225 $ 540,609 $ 442,553
(e)
Average pawn loan balance
outstanding -
Pawn lending segment:
Domestic $ 162,100 $ 150,792 $ 148,796 $ 139,363
Foreign (e) 21,140 - 18,893 -
Combined pawn lending $ 183,240 $ 150,792 $ 167,689 $ 139,363
segment (e)
Cash advance segment - 1,312 - 637 -
storefront operations
Combined average pawn loan $ 184,552 $ 150,792 $ 168,326 $ 139,363
balance outstanding (e)
Ending pawn loan balance -
Pawn lending segment:
Domestic $ 166,481 $ 158,226 $ 166,481 $ 158,226
Foreign (e) 22,429 - 22,429 -
Combined pawn lending $ 188,910 $ 158,226 $ 188,910 $ 158,226
segment (e)
Cash advance segment - 1,568 - 1,568 -
storefront operations
Combined ending pawn loan
balance per location $ 190,478 $ 158,226 $ 190,478 $ 158,226
offering pawn loans (e)
Ending pawn loan balance per
location offering pawn loans
--
Pawn lending segment :
Domestic $ 341 $ 325 $ 341 $ 325
Foreign (e) $ 143 $ - $ 143 $ -
Combined pawn lending $ 293 $ 325 $ 293 $ 325
segment (e)
Cash advance segment - $ 14 $ - $ 14 $ -
storefront operations
Combined ending pawn loan
balance per location $ 250 $ 325 $ 250 $ 325
offering pawn loans (e)
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Three Months Ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
Average pawn
loan amount at
end of period
(not in
thousands) -
Pawn lending
segment:
Domestic $ 119 $ 121 $ 119 $ 121
Foreign (e) $ 103 $ - $ 103 $ -
Combined pawn
lending segment $ 117 $ 121 $ 117 $ 121
(e)
Cash advance
segment - $ 104 $ - $ 104 $ -
storefront
operations
Combined average
pawn loan amount $ 117 $ 121 $ 117 $ 121
at end of period
(e)
Disposition of
merchandise -
domestic -
Profit margin on
disposition of
merchandise
Pawn lending
segment - 34.1 % 35.5 % 35.3 % 37.5 %
domestic
Cash advance
segment - 36.7 % - % 35.5 % - %
storefront
operations
Combined profit
margin on 34.2 % 35.5 % 35.3 % 37.5 %
disposition of
merchandise
Disposition of
merchandise -
pawn lending
segment -
domestic -
Average
annualized 2.6 x 2.6 x 2.8 x 2.8 x
merchandise
turnover
Average balance
of merchandise
held for $ 226 $ 213 $ 217 $ 204
disposition per
average location
in operation
Ending balance
of merchandise
held for $ 238 $ 228 $ 238 $ 228
disposition per
location in
operation
Cash advance
activities(f)
Amount of cash
advances written
-(a) (c)
Funded by the
Company
Cash advance
segment:
Storefront $ 171,470 $ 146,504 $ 460,016 $ 449,571
Internet lending 174,492 202,706 510,038 551,222
Total cash $ 345,962 $ 349,210 $ 970,054 $ 1,000,793
advance segment
Pawn lending
segment - 15,958 15,100 43,924 43,229
domestic
Combined funded $ 361,920 $ 364,310 $ 1,013,978 $ 1,044,022
by the Company
Funded by
third-party
lenders(a) (b)
Cash advance
segment:
Storefront $ 24,197 $ 21,600 $ 64,810 $ 71,585
Internet lending 163,446 113,997 385,799 327,725
Card services 30,457 - 76,123 -
Total cash $ 218,100 $ 135,597 $ 526,732 $ 399,310
advance segment
Pawn lending
segment - 34,356 35,534 95,488 111,309
domestic
Combined funded
by third-party $ 252,456 $ 171,131 $ 622,220 $ 510,619
lenders (a) (b)
Aggregate amount
of cash advances
written -(a) (c)
Cash advance
segment:
Storefront $ 195,667 $ 168,104 $ 524,826 $ 521,156
Internet lending 337,938 316,703 895,837 878,947
Card services 30,457 - 76,123 -
Total cash $ 564,062 $ 484,807 $ 1,496,786 $ 1,400,103
advance segment
Pawn lending
segment - 50,314 50,634 139,412 154,538
domestic
Combined
aggregate amount $ 614,376 $ 535,441 $ 1,636,198 $ 1,554,641
of cash advances
written(a) (c)
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
FINANCIAL AND OPERATING DATA
(in thousands, except per share data)
Three Months Ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
Number of cash advances
written (not in thousands) -
Funded by the Company
Cash advance segment:
Storefront 387,635 422,009 1,038,877 1,267,211
Internet lending 445,928 487,572 1,270,268 1,318,454
Total cash advance segment 833,563 909,581 2,309,145 2,585,665
Pawn lending segment - 48,927 46,777 134,051 137,518
domestic
Combined by the Company 882,490 956,358 2,443,196 2,723,183
Funded by third-party
lenders(a) (b)
Cash advance segment:
Storefront 40,559 37,867 109,031 127,651
Internet lending 237,104 168,553 540,332 493,134
Card services 216,535 - 516,236 -
Total cash advance segment 494,198 206,420 1,165,599 620,785
Pawn lending segment - 64,325 75,031 178,450 236,729
domestic
Combined by third-party 558,523 281,451 1,344,049 857,514
lenders (a) (b)
Aggregate number of cash
advances written -(a) (c)
Cash advance segment:
Storefront 428,194 459,876 1,147,908 1,394,862
Internet lending 683,032 656,125 1,810,600 1,811,588
Card services 216,535 - 516,236 -
Total cash advance segment 1,327,761 1,116,001 3,474,744 3,206,450
Pawn lending segment - 113,252 121,808 312,501 374,247
domestic
Combined aggregate number of
cash advances written (a) 1,441,013 1,237,809 3,787,245 3,580,697
(c)
Cash advance customer
balances (gross):
Owned by Company(d)
Cash advance segment:
Storefront $ 42,581 $ 40,295 $ 42,581 $ 40,295
Internet lending 62,207 64,944 62,207 64,944
Card services 6,448 - 6,448 -
Total cash advance segment $ 111,236 $ 105,239 $ 111,236 $ 105,239
Pawn lending segment - 6,924 7,096 6,924 7,096
domestic
Combined owned by the $ 118,160 $ 112,335 $ 118,160 $ 112,335
Company(d)
Owned by third-party lenders
(a) (b)
Cash advance segment :
Storefront $ 4,373 $ 4,462 $ 4,373 $ 4,462
Internet lending 31,568 19,960 31,568 19,960
Card services 649 - 649 -
Total cash advance segment $ 36,590 $ 24,422 $ 36,590 $ 24,422
Pawn lending segment - 6,827 6,594 6,827 6,594
domestic
Combined owned by $ 43,417 $ 31,016 $ 43,417 $ 31,016
third-party lenders (a) (b)
Aggregate cash advance
customer balances (gross) -
(a) (c)
Cash advance segment:
Storefront $ 46,954 $ 44,757 $ 46,954 $ 44,757
Internet lending 93,775 84,904 93,775 84,904
Card services 7,097 - 7,097 -
Total cash advance segment $ 147,826 $ 129,661 $ 147,826 $ 129,661
Pawn lending segment - 13,751 13,690 13,751 13,690
domestic
Combined aggregate cash
advance customer balances $ 161,577 $ 143,351 $ 161,577 $ 143,351
(gross) (a) (c)
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
FINANCIAL AND OPERATING DATA
(in thousands, except per share data)
Three Months Ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
Average amount per cash
advance written (not in
thousands) -
Funded by the Company
Cash advance segment:
Storefront $ 442 $ 347 $ 443 $ 355
Internet lending $ 391 $ 416 $ 402 $ 418
Total cash advance segment $ 415 $ 384 $ 420 $ 387
Pawn lending segment - $ 326 $ 323 $ 328 $ 314
domestic
Combined by the Company $ 410 $ 381 $ 415 $ 383
Funded by third-party
lenders(a) (b)
Cash advance segment
Storefront $ 597 $ 570 $ 594 $ 561
Internet lending $ 689 $ 676 $ 714 $ 665
Card services $ 141 $ - $ 147 $ -
Total cash advance segment $ 441 $ 657 $ 452 $ 643
Pawn lending segment - $ 534 $ 474 $ 535 $ 470
domestic
Combined by third-party $ 452 $ 608 $ 463 $ 595
lenders (a) (b)
Aggregate average amount
per cash advance written -
(a) (c)
Cash advance segment:
Storefront $ 457 $ 366 $ 457 $ 374
Internet lending $ 495 $ 483 $ 495 $ 485
Card services $ 141 $ - $ 147 $ -
Total cash advance segment $ 425 $ 434 $ 431 $ 437
Pawn lending segment - $ 444 $ 416 $ 446 $ 413
domestic
Combined aggregate average
amount per cash advance $ 426 $ 433 $ 432 $ 434
written(a) (c)
Check cashing
Face amount of checks
cashed -
Company-owned locations:
Check cashing segment $ 5,175 $ 7,106 $ 17,348 $ 22,322
Cash advance segment 29,026 40,497 120,727 151,688
Pawn lending segment 4,918 7,222 18,307 27,483
Combined company-owned 39,119 54,825 156,382 201,493
locations
Franchised locations - 229,314 295,791 790,671 968,000
check cashing segment (a)
Combined face amount of $ 268,433 $ 350,616 $ 947,053 $ 1,169,493
checks cashed (a)
Fees collected from
customers -
Company-owned locations:
Check cashing segment $ 61 $ 89 $ 244 $ 313
Cash advance segment 687 957 3,012 4,072
Pawn lending segment 81 122 336 506
Combined company-owned 829 1,168 3,592 4,891
locations
Franchised locations - 3,150 4,073 11,288 13,740
check cashing segment (a)
Combined fees collected $ 3,979 $ 5,241 $ 14,880 $ 18,631
from customers (a)
Fees as a percentage of
checks cashed -
Company-owned locations:
Check cashing segment 1.2 % 1.3 % 1.4 % 1.4 %
Cash advance segment 2.4 2.4 2.5 2.7
Pawn lending segment 1.6 1.7 1.8 1.8
Combined company-owned 2.1 2.1 2.3 2.4
locations
Franchised locations - 1.4 1.4 1.4 1.4
check cashing segment(a)
Combined fees as a
percentage of checks 1.5 % 1.5 % 1.6 % 1.6 %
cashed (a)
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
FINANCIAL AND OPERATING DATA
(in thousands, except per share data)
Three Months Ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
Average check cashed (not in
thousands) -
Company-owned locations:
Check cashing segment $ 404 $ 400 $ 423 $ 405
Cash advance segment $ 510 $ 463 $ 581 $ 516
Pawn lending segment $ 335 $ 412 $ 410 $ 474
Combined company-owned locations $ 463 $ 447 $ 533 $ 495
Franchised locations - check cashing $ 412 $ 437 $ 457 $ 465
segment (a)
Combined average check cashed(a) $ 418 $ 436 $ 461 $ 464
(a) Non-generally accepted accounting principles in the United States ("non-GAAP") presentation. For informational purposes and to provide a greater understanding of the Company's businesses. Management believes that information provided with this level of detail is meaningful and useful in understanding the activities and business metrics of the Company's operations. The non-GAAP financial measure is provided immediately following its most comparable generally accepted accounting principles ("GAAP") amount and can be reconciled to its most comparable GAAP amount through the presentation of the financial information above.
(b) Includes (i) cash advances written by third-party lenders that were arranged by the Company on behalf of the third-party lenders through a CSO Program offered in certain states in the Company's storefront and online distribution channels, and (ii) line of credit advances issued by a third-party lender utilizing the Company's card services distribution channel to process these cash advances under a line of credit offered by such lender on certain stored-value and payroll cards issued by such lender. In its card services distribution channel, the Company acquires a participation interest in the receivables generated by the third party lender; and cash advance fees associated with the Company's card services activities include revenue from the Company's participation interest in the line of credit receivables generated by the third party lender, as well as marketing, processing and other miscellaneous fee income. (Note: The Company did not commence business in the card services distribution channel until the third quarter of 2008).
(c) Includes cash advances written by the Company as well as the cash advance products described in footnote (b) above.
(d) Amounts recorded in the Company's consolidated financial statements.
(e) Includes Prenda Facil locations.
(f) Excludes franchised locations.
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
INCOME FROM OPERATIONS BY OPERATING SEGMENT
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(in thousands, except per share data)
2009 2008
Funded by the Company(a)
Active cash advances and fees receivable $ 77,216 $ 73,097
Cash advances and fees in collection 19,550 25,857
Total funded by the Company(a) 96,766 98,954
Funded by third-party lenders(b) (c)
Active cash advances and fees receivable 48,463 31,072
Cash advances and fees in collection 16,348 13,325
Total funded by third-party lenders(b) (c) 64,811 44,397
Combined gross portfolio of cash advances and fees 161,577 143,351
receivable(b) (d)
Less: Elimination of cash advances owned by third-party 43,417 31,016
lenders
Company-owned cash advances and fees receivable, gross 118,160 112,335
Less: Allowance for losses 24,688 25,301
Cash advances and fees receivable, net $ 93,472 $ 87,034
Three months ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
Allowance for losses for
Company-owned cash
advances
Balance at beginning of $ 22,163 $ 27,401 $ 21,495 $ 25,676
period
Cash advance loss 36,933 41,301 90,961 102,688
provision
Charge-offs (38,749 ) (47,762 ) (101,890 ) (123,443 )
Recoveries 4,341 4,360 14,122 20,380
Balance at end of period $ 24,688 $ 25,301 $ 24,688 $ 25,301
Accrual for third-party
lender-owned cash advances
Balance at beginning of $ 2,059 $ 2,309 $ 2,135 $ 1,828
period
(Decrease) increase in 757 (352 ) 681 129
loss provision
Balance at end of period $ 2,816 $ 1,957 $ 2,816 $ 1,957
Combined statistics(d)
Combined cash advance loss $ 37,690 $ 40,950 $ 91,642 $ 102,817
provision
Charge-offs (net of 34,408 43,402 87,768 103,063
recoveries)
Combined cash advance loss
provision as a % of 6.1 % 7.6 % 5.6 % 6.6 %
combined cash advances
written (b)
Charge-offs (net of
recoveries) as a % of 5.6 % 8.1 % 5.4 % 6.6 %
combined cash advances
written (b)
Combined allowance for
losses and accrued
third-party lender losses 17.0 % 19.0 % 17.0 % 19.0 %
as a % of combined gross
portfolio (b)
(a) Cash advances written by the Company in its pawn and cash advance locations and through the internet distribution channel.
(b) Non-GAAP presentation. For informational purposes and to provide a greater understanding of the Company's businesses. Management believes that information provided with this level of detail is meaningful and useful in understanding the activities and business metrics of the Company's operations. Management evaluates the cash advance portfolio on an aggregate basis including the loss provision for the Company-owned and the third-party lender-owned portfolio that the Company guarantees. The non-GAAP financial measure is provided immediately following its most comparable GAAP amount and can be reconciled to its most comparable GAAP amount through the presentation of the financial information above.
(c) Cash advances written by third-party lenders that were marketed, processed, or arranged by the Company on behalf of the third-party lenders, all at the Company's pawn and cash advance locations and through the internet and card services distribution channels. (Note: The Company did not commence business in the card services distribution channel until the third quarter of 2008.)
(d) Includes (i) cash advances written by the Company, and (ii) cash advances written by third-party lenders that were marketed, processed or arranged, by the Company on behalf of the third-party lenders, all at the Company's pawn and cash advance locations and through the Company's internet and card services distribution channels. (Note: The Company did not commence business in the card services distribution channel until the third quarter of 2008.)
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
INCOME FROM OPERATIONS BY OPERATING SEGMENT
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(in thousands, except per share data)
Pawn Lending Cash Advance Check Cashing Consolidated
(1) (2)
Three Months
Ended
September 30,
2009
Revenue
Finance and
service $ 59,673 $ 247 $ - $ 59,920
charges
Proceeds from
disposition of 110,302 4,484 - 114,786
merchandise
Cash advance 8,334 89,875 - 98,209
fees
Check cashing
fees, 1,030 1,584 595 3,209
royalties and
other
Total revenue 179,339 96,190 595 276,124
Cost of
revenue - 72,704 2,838 - 75,542
disposed
merchandise
Net revenue 106,635 93,352 595 200,582
Expenses
Operations 57,732 31,380 256 89,368
Cash advance 2,352 35,338 - 37,690
loss provision
Administration 9,869 11,751 255 21,875
Depreciation
and 7,049 3,129 41 10,219
amortization
Total expenses 77,002 81,598 552 159,152
Income from $ 29,633 $ 11,754 $ 43 $ 41,430
operations
As of
September 30,
2009
Total assets $ 778,621 $ 443,900 $ 6,491 $ 1,229,012
Goodwill $ 208,819 $ 279,255 $ 5,310 $ 493,384
Pawn Lending Cash Advance Check Cashing Consolidated
(1) (2)
Three Months
Ended
September 30,
2008
Revenue
Finance and
service $ 46,977 $ - $ - $ 46,977
charges
Proceeds from
disposition of 105,517 - - 105,517
merchandise
Cash advance 8,584 87,717 - 96,301
fees
Check cashing
fees, 967 1,610 778 3,355
royalties and
other
Total revenue 162,045 89,327 778 252,150
Cost of
revenue - 68,033 - - 68,033
disposed
merchandise
Net revenue 94,012 89,327 778 184,117
Expenses
Operations 53,000 29,014 305 82,319
Cash advance 2,725 38,225 - 40,950
loss provision
Administration 5,527 9,556 276 15,359
Depreciation
and 5,995 3,246 57 9,298
amortization
Total expenses 67,247 80,041 638 147,926
Income from $ 26,765 $ 9,286 $ 140 $ 36,191
operations
As of
September 30,
2008
Total assets $ 625,192 $ 448,057 $ 7,027 $ 1,080,276
Goodwill $ 143,998 $ 271,532 $ 5,310 $ 420,840
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
INCOME FROM OPERATIONS BY OPERATING SEGMENT
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(in thousands, except per share data)
Pawn Lending Cash Advance Check Cashing Consolidated
(1) (2)
Nine Months
Ended
September 30,
2009
Revenue
Finance and
service $ 166,755 $ 404 $ - $ 167,159
charges
Proceeds from
disposition of 346,161 8,558 - 354,719
merchandise
Cash advance 23,141 239,978 - 263,119
fees
Check cashing
fees, 2,982 6,436 2,181 11,599
royalties and
other
Total revenue 539,039 255,376 2,181 796,596
Cost of
revenue - 224,059 5,519 - 229,578
disposed
merchandise
Net revenue 314,980 249,857 2,181 567,018
Expenses
Operations 173,417 86,997 870 261,284
Cash advance 5,068 86,574 - 91,642
loss provision
Administration 32,582 32,705 744 66,031
Depreciation
and 21,255 9,511 187 30,953
amortization
Total expenses 232,322 215,787 1,801 449,910
Income from $ 82,658 $ 34,070 $ 380 $ 117,108
operations
Pawn Lending Cash Advance Check Cashing Consolidated
(1) (2)
Nine Months
Ended
September 30,
2008
Revenue
Finance and
service $ 133,788 $ - $ - $ 133,788
charges
Proceeds from
disposition of 330,189 - - 330,189
merchandise
Cash advance 26,514 248,096 - 274,610
fees
Check cashing
fees, 2,969 6,871 2,636 12,476
royalties and
other
Total revenue 493,460 254,967 2,636 751,063
Cost of
revenue - 206,290 - - 206,290
disposed
merchandise
Net revenue 287,170 254,967 2,636 544,773
Expenses
Operations 159,408 83,148 997 243,553
Cash advance 7,667 95,150 - 102,817
loss provision
Administration 27,081 25,985 824 53,890
Depreciation
and 17,525 10,249 182 27,956
amortization
Total expenses 211,681 214,532 2,003 428,216
Income from $ 75,489 $ 40,435 $ 633 $ 116,557
operations
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
INCOME FROM OPERATIONS BY OPERATING SEGMENT
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(in thousands, except per share data)
(1) The Pawn Lending segment is composed of the Company's domestic pawn lending
operations and Prenda Facil. The following table summarizes the results from
each channel's contributions to the Pawn Lending segment for the three and nine
months ended September 30, 2009 and 2008 (the average exchange rate of MXN
(Mexican pesos) to USD was 13.330 and 14.178 for the three and nine month
periods, respectively):
Domestic Foreign Total Pawn Lending
Three Months Ended September 30, 2009
Revenue
Finance and service charges $ 52,181 $ 7,492 $ 59,673
Proceeds from disposition of merchandise 110,302 - 110,302
Cash advance fees 8,334 - 8,334
Check cashing fees, royalties and other 835 195 1,030
Total revenue 171,652 7,687 179,339
Cost of revenue - disposed merchandise 72,704 - 72,704
Net revenue 98,948 7,687 106,635
Expenses
Operations 54,601 3,131 57,732
Cash advance loss provision 2,352 - 2,352
Administration 7,990 1,879 9,869
Depreciation and amortization 6,083 966 7,049
Total expenses 71,026 5,976 77,002
Income from operations $ 27,922 $ 1,711 $ 29,633
Domestic Foreign Total Pawn Lending
Three Months Ended September 30, 2008
Revenue
Finance and service charges $ 46,977 $ - $ 46,977
Proceeds from disposition of merchandise 105,517 - 105,517
Cash advance fees 8,584 - 8,584
Check cashing fees, royalties and other 967 - 967
Total revenue 162,045 - 162,045
Cost of revenue - disposed merchandise 68,033 - 68,033
Net revenue 94,012 - 94,012
Expenses
Operations 53,000 - 53,000
Cash advance loss provision 2,725 - 2,725
Administration 5,527 - 5,527
Depreciation and amortization 5,995 - 5,995
Total expenses 67,247 - 67,247
Income from operations $ 26,765 $ - $ 26,765
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
INCOME FROM OPERATIONS BY OPERATING SEGMENT
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(in thousands, except per share data)
Domestic Foreign Total Pawn Lending
Nine Months Ended September 30, 2009
Revenue
Finance and service charges $ 145,893 $ 20,862 $ 166,755
Proceeds from disposition of 346,161 - 346,161
merchandise
Cash advance fees 23,141 - 23,141
Check cashing fees, royalties and other 2,653 329 2,982
Total revenue 517,848 21,191 539,039
Cost of revenue - disposed merchandise 224,059 - 224,059
Net revenue 293,789 21,191 314,980
Expenses
Operations 164,748 8,669 173,417
Cash advance loss provision 5,068 - 5,068
Administration 27,649 4,933 32,582
Depreciation and amortization 18,558 2,697 21,255
Total expenses 216,023 16,299 232,322
Income from operations $ 77,766 $ 4,892 $ 82,658
Domestic Foreign Total Pawn Lending
Nine Months Ended September 30, 2008
Revenue
Finance and service charges $ 133,788 $ - $ 133,788
Proceeds from disposition of 330,189 - 330,189
merchandise
Cash advance fees 26,514 - 26,514
Check cashing fees, royalties and other 2,969 - 2,969
Total revenue 493,460 - 493,460
Cost of revenue - disposed merchandise 206,290 - 206,290
Net revenue 287,170 - 287,170
Expenses
Operations 159,408 - 159,408
Cash advance loss provision 7,667 - 7,667
Administration 27,081 - 27,081
Depreciation and amortization 17,525 - 17,525
Total expenses 211,681 - 211,681
Income from operations $ 75,489 $ - $ 75,489
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES INCOME FROM OPERATIONS BY OPERATING SEGMENT THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (in thousands, except per share data) (2)The Cash Advance segment is composed of three distribution channels - a multi-unit "storefront" platform, an online, internet based lending platform, and a card services business. The following table summarizes the results from each channel's contributions to the Cash Advance segment for the three and nine months ended September 30, 2009 and 2008: Three Months Total Cash Ended September Storefront Internet Lending Card Services Advance 30, 2009 Revenue Finance and $ 247 $ - $ - $ 247 service charges Proceeds from disposition of 4,484 - - 4,484 merchandise Cash advance 23,285 63,751 2,839 89,875 fees Check cashing fees, royalties 1,288 294 2 1,584 and other Total revenue 29,304 64,045 2,841 96,190 Cost of revenue - disposed 2,838 - - 2,838 merchandise Net revenue 26,466 64,045 2,841 93,352 Expenses Operations 13,976 16,594 810 31,380 Cash advance 4,838 29,394 1,106 35,338 loss provision Administration 2,345 9,259 147 11,751 Depreciation and 1,228 1,744 157 3,129 amortization Total expenses 22,387 56,991 2,220 81,598 Income from $ 4,079 $ 7,054 $ 621 $ 11,754 operations Three Months Total Cash Ended September Storefront Internet Lending Card Services Advance 30, 2008 Revenue Cash advance $ 26,859 $ 60,031 $ 827 $ 87,717 fees Check cashing fees, royalties 1,553 55 2 1,610 and other Total revenue 28,412 60,086 829 89,327 Expenses Operations 17,763 10,427 824 29,014 Cash advance 6,411 31,486 328 38,225 loss provision Administration 2,651 6,805 100 9,556 Depreciation and 1,883 1,363 - 3,246 amortization Total expenses 28,708 50,081 1,252 80,041 Income from $ (296 ) $ 10,005 $ (423 ) $ 9,286 operations
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES INCOME FROM OPERATIONS BY OPERATING SEGMENT THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (in thousands, except per share data) Nine Months Total Cash Ended September Storefront Internet Lending Card Services Advance 30, 2009 Revenue Finance and $ 404 $ - $ - $ 404 service charges Proceeds from disposition of 8,558 - - 8,558 merchandise Cash advance 62,520 170,361 7,097 239,978 fees Check cashing fees, royalties 5,540 890 6 6,436 and other Total revenue 77,022 171,251 7,103 255,376 Cost of revenue - disposed 5,519 - - 5,519 merchandise Net revenue 71,503 171,251 7,103 249,857 Expenses Operations 44,174 40,291 2,532 86,997 Cash advance 10,564 73,065 2,945 86,574 loss provision Administration 6,975 25,296 434 32,705 Depreciation and 4,015 5,089 407 9,511 amortization Total expenses 65,728 143,741 6,318 215,787 Income from $ 5,775 $ 27,510 $ 785 $ 34,070 operations Nine Months Total Cash Ended September Storefront Internet Lending Card Services Advance 30, 2008 Revenue Cash advance $ 82,979 $ 164,290 $ 827 $ 248,096 fees Check cashing fees, royalties 6,810 59 2 6,871 and other Total revenue 89,789 164,349 829 254,967 Expenses Operations 51,637 30,691 820 83,148 Cash advance 17,421 77,401 328 95,150 loss provision Administration 7,992 17,893 100 25,985 Depreciation and 6,688 3,561 - 10,249 amortization Total expenses 83,738 129,546 1,248 214,532 Income from $ 6,051 $ 34,803 $ (419 ) $ 40,435 operations
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
INVENTORY AND GROSS PROFIT OPERATING DATA
THREE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(in thousands, except per share data)
The table below summarizes the age of merchandise held for disposition before
valuation allowance of $0.7 million and $1.9 million, respectively, at
September 30, 2009 and 2008 (dollars in thousands).
2009 2008
Amount % Amount %
Merchandise held for 1 year or less -
Jewelry $ 73,108 62.2 % $ 75,718 67.0 %
Other merchandise 36,014 30.6 28,784 25.5
Total merchandise held for 1 year or 109,122 92.8 104,502 92.5
less
Merchandise held for more than 1 year -
Jewelry 5,207 4.4 5,222 4.6
Other merchandise 3,260 2.8 3,224 2.9
Total merchandise held for more than 1 8,467 7.2 8,446 7.5
year
Total merchandise held for disposition $ 117,589 100.0 % $ 112,948 100.0 %
NON-GAAP DISCLOSURE
In addition to the financial information prepared in conformity with GAAP, the Company provides historical non-GAAP financial information. Each non-GAAP financial measure included in the Company's Management Discussion and Analysis has been indicated by footnote.
Management uses the non-GAAP financial measures for internal managerial purposes and believes that presentation of non-GAAP financial information is meaningful and useful in understanding the activities and business metrics of the Company's operations. Management believes that these non-GAAP financial measures reflect an additional way of viewing aspects of the Company's business that, when viewed with the Company's GAAP results, provide a more complete understanding of factors and trends affecting the Company's business.
Management provides non-GAAP financial information for informational purposes and to enhance understanding of the Company's GAAP consolidated financial statements. Readers should consider the information in addition to, but not instead of, the Company's financial statements prepared in accordance with GAAP. This non-GAAP financial information may be determined or calculated differently by other companies, limiting the usefulness of those measures for comparative purposes.
Source: Cash America International, Inc.
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