Exhibit 99.1 |
|
|
FOR IMMEDIATE RELEASE
Contacts: | Jamie Fulmer- (864) 342-5633 |
| Director of Investor Relations |
| jfulmer@advanceamerica.net |
Advance America Earnings Per Share Increase 18.8% during Second Quarter
SPARTANBURG, S.C., July 25, 2007– Advance America, Cash Advance Centers, Inc. (NYSE: AEA) today reported the results of its operations for the second quarter and six months ended June 30, 2007.
For the six months ended June 30, 2007, total revenues increased 11.0% to $342.0 million, compared to $308.1 million for same period in 2006. Total revenues for the quarter ended June 30, 2007 increased 11.6% to $173.9 million compared to $155.9 million for the same period in 2006. For the quarter ended June 30, 2007, total revenues for the centers opened prior to April 1, 2006 and still open as of June 30, 2007 increased 8.2% compared to the same period in 2006.
The provision for doubtful accounts as a percent of total revenues for the quarter ended June 30, 2007 was 17.7% compared to 17.6% for the same period in 2006. Proceeds from the sale of previously written-off customer receivables during the second quarter of 2007 totaled approximately $3.0 million compared to $1.2 million for the same period in 2006.
Center gross profit increased 12.9%, to $100.1 million in the first six months of 2007 from $88.6 million in the same period of 2006. For the quarter ended June 30, 2007, center gross profit increased 15.1% to $44.3 million compared to $38.5 million for the same period in 2006.
Net income for the first six months of 2007 increased 11.5% to $37.2 million, compared to $33.3 million for the same period in 2006. Net income for the quarter ended June 30, 2007 increased 15.0% to $14.8 million compared to $12.9 million for the same period in 2006.
Diluted earnings per share increased 18.8% to $0.19 for the quarter ended June 30, 2007, compared to diluted earnings per share of $0.16 for the same period in 2006. For the six months ended June 30, 2007, diluted earnings per share were $0.47 compared to diluted earnings per share of $0.41 for the same period in 2006.
Commenting on the second quarter 2007 results, Advance America’s President and Chief Executive Officer Ken Compton said, “We are pleased with our tenth straight quarter of revenue growth as a public company. We remain pleased with the fundamental strength of our business and continued growth in profitability. In the second half of 2007, we look forward to building on the results of the second quarter by focusing on the performance of our 2,900 centers, expanding our geographic footprint, and offering additional products and services.”
On June 28, 2007 the Company’s subsidiary in the United Kingdom completed the acquisition of its first center and immediately began operations. The Company is also in final negotiations to acquire 15 additional centers. Commenting on this recent activity, Compton said, “We are pleased to have our first center operating outside of the United States and look forward to expanding our business in the United Kingdom and elsewhere.”
Today, the Company’s Board of Directors declared a regular quarterly dividend of $0.125 per share. The dividend will be payable on September 7, 2007, to stockholders of record as of August 28, 2007.
The Company will discuss these results during a conference call on Thursday, July 26, at 9:00 a.m. (EDT). To listen to this call, please dial the conference telephone number (800) 378-9344. This call will also be webcast live and can be accessed at Advance America’s website www.advanceamericacash.com. An audio replay of the call will be available online or by telephone (888) 203-1112 (replay passcode: 7866495) until the close of business on August 2, 2007.
About Advance America
Founded in 1997, Advance America, Cash Advance Centers, Inc. is the country’s leading provider of payday cash advance services with approximately 2,900 centers in 37 states. The Company offers convenient, less-costly credit options to consumers whose needs are not met by traditional financial institutions. The Company is a founding member of the Community Financial Services Association of America (CFSA), whose mission is to promote laws that provide substantive consumer protections and to encourage responsible industry practices.
Forward-Looking Statements and Information:
Certain statements contained in this release may constitute “forward- looking statements” within the meaning of federal securities laws. All statements in this release other than those relating to our historical information or current condition are forward-looking statements. For example, any statements regarding our future financial performance, our business strategy, and expected developments in our industry are forward-looking statements. Although we believe that the current views and expectations reflected in these forward-looking statements are reasonable, those views and expectations and the related statements are inherently subject to risks, uncertainties, and other factors, many of which are not under our control and may not even be predictable. Therefore, actual results could differ materially from our expectations as of today and any future results, performance, or achievements expressed directly or impliedly by the forward- looking statements. For a more detailed discussion of some of the factors that may cause our actual results to differ from our current expectations, please refer to the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2006, a copy of which is available from the Securities and Exchange Commission, upon request from us, or by going to our website: www.advanceamericacash.com.
Interim Unaudited Consolidated Statements of Income
Three and Six Months Ended June 30, 2006 and 2007
(in thousands, except per share data)
| | Three Months Ended | | Six Months Ended | |
| | June 30, | | June 30, | |
| | 2006 | | 2007 | | 2006 | | 2007 | |
| | | | | | | | | |
Revenues: | | | | | | | | | |
Fees and interest charged to customers | | $ | 152,611 | | $ | 173,939 | | $ | 295,703 | | $ | 342,022 | |
Marketing, processing and servicing fees | | 3,310 | | — | | 12,387 | | — | |
Total revenues | | 155,921 | | 173,939 | | 308,090 | | 342,022 | |
| | | | | | | | | |
Provision for doubtful accounts and agency bank losses | | (27,435 | ) | (30,824 | ) | (39,311 | ) | (46,639 | ) |
Net revenues | | 128,486 | | 143,115 | | 268,779 | | 295,383 | |
| | | | | | | | | |
Center Expenses: | | | | | | | | | |
Salaries and related payroll costs | | 46,171 | | 49,759 | | 92,718 | | 98,956 | |
Occupancy costs | | 21,081 | | 23,686 | | 42,129 | | 47,219 | |
Center depreciation expense | | 4,000 | | 4,264 | | 7,953 | | 8,533 | |
Advertising expense | | 6,111 | | 7,592 | | 9,430 | | 12,901 | |
Other center expenses | | 12,635 | | 13,528 | | 27,925 | | 27,686 | |
Total center expenses | | 89,998 | | 98,829 | | 180,155 | | 195,295 | |
Center gross profit | | 38,488 | | 44,286 | | 88,624 | | 100,088 | |
| | | | | | | | | |
Corporate and Other Expenses (Income): | | | | | | | | | |
General and administrative expenses | | 13,766 | | 15,684 | | 26,777 | | 28,963 | |
Corporate depreciation expense | | 935 | | 812 | | 1,896 | | 1,630 | |
Interest expense | | 919 | | 2,290 | | 1,826 | | 4,603 | |
Interest income | | (123 | ) | (122 | ) | (299 | ) | (198 | ) |
Loss on disposal of property and equipment | | 283 | | 283 | | 491 | | 535 | |
Loss on impairment of assets | | — | | — | | — | | 314 | |
Income before income taxes | | 22,708 | | 25,339 | | 57,933 | | 64,241 | |
Income tax expense | | 8,924 | | 10,186 | | 23,237 | | 26,529 | |
Income before income of consolidated variable interest entity | | 13,784 | | 15,153 | | 34,696 | | 37,712 | |
Income of consolidated variable interest entity | | (888 | ) | (317 | ) | (1,373 | ) | (560 | ) |
Net income | | $ | 12,896 | | $ | 14,836 | | $ | 33,323 | | $ | 37,152 | |
| | | | | | | | | |
Net income per common share - basic | | $ | 0.16 | | $ | 0.19 | | $ | 0.41 | | $ | 0.47 | |
Weighted average number of shares outstanding - basic | | 81,829 | | 79,122 | | 81,828 | | 79,120 | |
| | | | | | | | | |
Net income per common share - diluted | | $ | 0.16 | | $ | 0.19 | | $ | 0.41 | | $ | 0.47 | |
Weighted average number of shares outstanding - diluted | | 81,921 | | 79,286 | | 81,893 | | 79,199 | |
Consolidated Balance Sheets
December 31, 2006 and June 30, 2007 (unaudited)
(in thousands, except per share data)
| | December 31, | | June 30, | |
| | 2006 | | 2007 | |
| | | | (unaudited) | |
Assets | | | | | |
Current assets | | | | | |
Cash and cash equivalents | | $ | 67,245 | | $ | 36,898 | |
Advances and fees receivable, net | | 237,725 | | 226,742 | |
Deferred income taxes | | 11,798 | | 10,084 | |
Other current assets | | 11,664 | | 13,621 | |
Total current assets | | 328,432 | | 287,345 | |
Restricted cash | | 5,446 | | 5,547 | |
Property and equipment, net | | 63,198 | | 59,659 | |
Goodwill | | 122,627 | | 122,627 | |
Other assets | | 5,389 | | 5,286 | |
Total assets | | $ | 525,092 | | $ | 480,464 | |
| | | | | |
Liabilities and Stockholders’ Equity | | | | | |
Current liabilities | | | | | |
Accounts payable | | $ | 21,164 | | $ | 19,549 | |
Accrued liabilities | | 31,737 | | 29,222 | |
Income taxes payable | | 14,983 | | 1,391 | |
Current portion of long-term debt | | 537 | | 524 | |
Total current liabilities | | 68,421 | | 50,686 | |
Revolving credit facility | | 104,835 | | 66,846 | |
Long-term debt | | 5,678 | | 5,411 | |
Deferred income taxes | | 13,564 | | 10,223 | |
Other liabilities | | 157 | | 231 | |
Total liabilities | | 192,655 | | 133,397 | |
| | | | | |
Non-controlling interest in variable interest entity | | 32,540 | | 28,618 | |
| | | | | |
Commitments and contingencies | | | | | |
Stockholders’ equity | | | | | |
Preferred stock, par value $.01 per share, 25,000 shares authorized;
no shares issued and outstanding | | — | | — | |
Common stock, par value $.01 per share, 250,000 shares authorized;
96,821 shares issued and 79,534 shares outstanding at December 31, 2006;
96,821 shares issued and 79,544 shares outstanding at June 30, 2007 | | 968 | | 968 | |
Paid in capital | | 285,382 | | 286,331 | |
Retained earnings | | 118,258 | | 135,529 | |
Common stock in treasury (17,287 shares at cost at December 31, 2006;
17,277 shares at cost at June 30, 2007) | | (104,711 | ) | (104,379 | ) |
Total stockholders’ equity | | 299,897 | | 318,449 | |
Total liabilities and stockholders’ equity | | $ | 525,092 | | $ | 480,464 | |
