Exhibit 99.1
Cash America Announces 52% Increase in Second Quarter Net Income and Declares Dividend
FORT WORTH, Texas--(BUSINESS WIRE)--Cash America International, Inc. (NYSE: CSH) reported that its 2008 second quarter net income increased 52% to $20,137,000 from $13,209,000 for the same period in 2007. The related earnings per share for the second quarter ended June 30, 2008 were up 56% to 67 cents per share compared to 43 cents per share for the same three months in 2007. These results exceeded the upwardly revised range of expected earnings per share of between 62 and 64 cents that the Company announced on July 7, 2008 due to more favorable loan loss expenses in the quarter.
Revenue from pawn loans increased 17% and sales of merchandise increased 26% during the second quarter of 2008, leading to $248.0 million in total revenue, up 16% from $213.9 million in the prior year period, an increase of $34.1 million. Also contributing to the growth in total revenue was a 7% increase in cash advance fees. Cash advance fees increased $5.9 million, to $92.8 million in the second quarter 2008, up from $86.9 million in the same period in 2007. Revenue from cash advance fees were led by a 24% increase in cash advance fees from the Company’s online distribution channel during the quarter which offset a drop in cash advance fees from storefront operations. Consolidated operating income increased 56% to $35.9 million in the three months ended June 30, 2008 compared to $23.0 million in the second quarter of 2007.
Commenting on the results of the quarter, Daniel R. Feehan, President and Chief Executive Officer of Cash America said, “The results of the second quarter finished above our initial estimates as earnings from our pawn related lending activities were particularly strong during the quarter. Higher loan demand continued our trend of increased revenue from pawn loans and we experienced better than expected retail sales activity during the quarter, partially aided by the tax stimulus payments received by many of our customers. In addition, loan losses related to our cash advance product continued to moderate leading to a significant improvement in our operating income margins generating the 56% increase in earnings per share on a 16% rise in total revenue.”
For the first six months of fiscal year 2008 Cash America posted a 42% increase in net income to $45,948,000 ($1.53 per share, up 44%) compared to $32,443,000 ($1.06 per share) in the same period for the prior year. The increase in year over year net income for the first six months of 2008 was achieved on a 14% increase in total revenue, which reached $498.9 million in the six months ended June 30, 2008 compared to $436.8 million for the same period in the prior year.
Cash America will host a conference call to discuss the second quarter results on Thursday, July 24th at 7:45 AM CDT. A live web cast of the call will be available on the Investor Relations section of the Company’s corporate web site (http://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. A replay will be available on the Company’s web site for 90 days following the conference call.
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 August 20, 2008 to shareholders of record on August 6, 2008.
Outlook for the Third Quarter of 2008 and Related Fiscal Year
Management believes that the opportunities for sustained growth in revenue and earnings will be largely associated with the customer demand for the credit products provided by the Company, which take the form of pawn loans and short-term cash advances. Other elements expected to affect the growth in revenue include the regulatory governance of loan products and the continued development and growth of the Company’s online distribution channel for cash advance products. As the Company enters the third quarter of 2008, management anticipates that demand for the Company’s products will continue to remain strong. Management is tempering its expectations, however, due to the possibility that the Company may close all or a portion of its cash advance lending locations in the state of Ohio as a result of recently enacted legislation which reduces the fees permitted to be charged to a level that it would not enable the Company to offer the cash advance product profitably (for additional details refer to the Company’s press release dated May 15, 2008). While the Company is evaluating alternatives to continue to serve customers in need of short-term loans in Ohio, management has phased out the results of its storefront cash advance business in Ohio in its expected results for the third quarter pending the outcome of this evaluation. Based on its views and on the preceding factors management expects that the third quarter 2008 net income per share will be between 62 and 66 cents per share (excluding one-time charges related to store closures in Ohio) compared to 55 cents per share in the third quarter 2007, which excludes the pre-tax gain of $6.3 million from the sale of the Company’s notes receivable and its rights to acquire a minority ownership position in an overseas pawn lending business, Svensk Pantbelåning which occurred in September of 2007.
Expectations for the remainder of fiscal 2008 will be impacted by earning asset levels in later periods based on customer demand for credit products and retail sales activities in the fourth quarter as well as loan loss expense in future periods. However, based on the strong start to the first half of the year, management increases its previously announced expectation for the full year 2008 earnings per share to between $3.00 and $3.20 up from between $2.85 and $3.00, which was announced on May 15, 2008. These expected results for fiscal 2008 also assume that the Company will close its Ohio cash advance locations in the third quarter of 2008, but do not include one-time charges for any store closures associated with this action. The new 2008 estimate compares to $2.48 per share in fiscal 2007. The full year 2007 results exclude the $6.3 million (13 cents per share after taxes) gain in the third quarter of 2007
Cash America International, Inc. is a provider of specialty financial services to individuals in the United States with 928 total locations as of June 30, 2008. Cash America is the largest provider of secured non-recourse loans to individuals, commonly referred to as pawn loans, through 501 locations in 22 states under the brand names Cash America Pawn and SuperPawn. The Company also offers short-term cash advances in many of its locations including 292 locations that offer this service under the brand names Cash America Payday Advance and Cashland. Short-term cash advances are also offered over the Internet to customers in 33 states in the United States and in the United Kingdom at http://www.cashnetusa.com and http://www.quickquid.co.uk, respectively. In addition, check cashing services are provided through its 135 franchised and Company-owned “Mr. Payroll” check cashing centers.
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.cashlandloans.com | http://www.quickquid.co.uk | |||||
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 demand for the Company's services, the actions of third parties who offer products and services at the Company’s locations, fluctuations in the price of gold, changes in competition, the ability of the Company to open new operating units in accordance with its plans, economic conditions, real estate market fluctuations, interest rate fluctuations, changes in foreign currency exchange rates, changes in the capital markets, changes in tax and other laws and governmental rules and regulations applicable to the Company's business, the ability to successfully integrate newly acquired businesses into the Company’s operations and other risks 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,” “plans,” “expects,” “anticipates” and similar expressions 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 | Six Months Ended | ||||||||||
| June 30, | June 30, | ||||||||||
| 2008 |
| 2007 | 2008 | 2007 | |||||||
Consolidated Operations: | ||||||||||||
Total revenue | $ | 247,979 | $ | 213,881 | $ | 498,913 | $ | 436,753 | ||||
Net revenue | 181,238 | 161,097 | 360,656 | 322,044 | ||||||||
Total operating expenses | 145,344 | 138,063 | 280,290 | 265,012 | ||||||||
Income from operations | $ | 35,894 | $ | 23,034 | $ | 80,366 | $ | 57,032 | ||||
Income before income taxes | 32,698 | 19,491 | 73,688 | 50,203 | ||||||||
Net Income | $ | 20,137 | $ | 13,209 | $ | 45,948 | $ | 32,443 | ||||
Earnings per share: | ||||||||||||
Basic | $ | 0.69 | $ | 0.44 | $ | 1.57 | $ | 1.09 | ||||
Diluted | $ | 0.67 | $ | 0.43 | $ | 1.53 | $ | 1.06 | ||||
Weighted average shares: | ||||||||||||
Basic | 29,326 | 29,833 | 29,348 | 29,852 | ||||||||
Diluted | 30,094 | 30,557 | 30,103 | 30,579 | ||||||||
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||||
(in thousands, except share data) | ||||||||||||
June 30, | December 31, | |||||||||||
2008 | 2007 | 2007 | ||||||||||
(Unaudited) | ||||||||||||
Assets | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 29,963 | $ | 26,207 | $ | 22,725 | ||||||
Pawn loans | 142,211 | 131,528 | 137,319 | |||||||||
Cash advances, net | 85,492 | 77,948 | 88,148 | |||||||||
Merchandise held for disposition, net | 96,807 | 83,522 | 98,134 | |||||||||
Finance and service charges receivable | 27,009 | 24,362 | 26,963 | |||||||||
Other receivables and prepaid expenses | 14,297 | 15,740 | 16,292 | |||||||||
Deferred tax assets | 22,271 | 21,722 | 20,204 | |||||||||
Total current assets | 418,050 | 381,029 | 409,785 | |||||||||
Property and equipment, net | 172,785 | 135,256 | 161,676 | |||||||||
Goodwill | 403,886 | 253,477 | 306,221 | |||||||||
Intangible assets, net | 21,423 | 25,538 | 23,484 | |||||||||
Other assets | 7,545 | 13,024 | 3,478 | |||||||||
Total assets | $ | 1,023,689 | $ | 808,324 | $ | 904,644 | ||||||
Liabilities and Stockholders’ Equity | ||||||||||||
Current liabilities: | ||||||||||||
Accounts payable and accrued expenses | $ | 62,908 | $ | 53,808 | $ | 65,399 | ||||||
Accrued supplemental acquisition payment | 56,000 | 14,250 | 22,000 | |||||||||
Customer deposits | 8,673 | 8,388 | 7,856 | |||||||||
Income taxes currently payable | 2,284 | 994 | 3,755 | |||||||||
Current portion of long-term debt | 8,500 | 16,786 | 8,500 | |||||||||
Total current liabilities | 138,365 | 94,226 | 107,510 | |||||||||
Deferred tax liabilities | 23,421 | 13,368 | 18,584 | |||||||||
Other liabilities | 2,025 | 1,589 | 1,671 | |||||||||
Long-term debt | 323,146 | 232,896 | 280,277 | |||||||||
Total liabilities | 486,957 | 342,079 | 408,042 | |||||||||
Stockholders’ equity: | ||||||||||||
Common stock, $.10 par value per share, 80,000,000 shares authorized, 30,235,164 shares issued | 3,024 | 3,024 | 3,024 | |||||||||
Additional paid-in capital | 162,977 | 162,620 | 163,581 | |||||||||
Retained earnings | 407,086 | 318,328 | 363,180 | |||||||||
Accumulated other comprehensive (loss) income | (1 | ) | 8 | 16 | ||||||||
Notes receivable secured by common stock | - | (18 | ) | - | ||||||||
Treasury shares, at cost (1,222,742 shares, 683,754 shares and 1,136,203 shares at June 30, 2008 and 2007, and December 31, 2007, respectively) | (36,354 | ) | (17,717 | ) | (33,199 | ) | ||||||
Total stockholders’ equity | 536,732 | 466,245 | 496,602 | |||||||||
Total liabilities and stockholders’ equity | $ | 1,023,689 | $ | 808,324 | $ | 904,644 | ||||||
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2008 |
| 2007 | 2008 | 2007 | ||||||||||||
(Unaudited) | ||||||||||||||||
Revenue | ||||||||||||||||
Finance and service charges | $ | 43,390 | $ | 37,194 | $ | 86,811 | $ | 75,625 | ||||||||
Proceeds from disposition of merchandise | 108,089 | 85,808 | 224,672 | 185,976 | ||||||||||||
Cash advance fees | 92,849 | 86,947 | 178,309 | 165,463 | ||||||||||||
Check cashing fees, royalties and other | 3,651 | 3,932 | 9,121 | 9,689 | ||||||||||||
Total Revenue | 247,979 | 213,881 | 498,913 | 436,753 | ||||||||||||
Cost of Revenue | ||||||||||||||||
Disposed merchandise | 66,741 | 52,784 | 138,257 | 114,709 | ||||||||||||
Net Revenue | 181,238 | 161,097 | 360,656 | 322,044 | ||||||||||||
Expenses | ||||||||||||||||
Operations | 79,946 | 75,588 | 160,077 | 148,754 | ||||||||||||
Cash advance loss provision | 34,733 | 42,328 | 61,867 | 75,076 | ||||||||||||
Administration | 21,138 | 12,248 | 39,688 | 25,749 | ||||||||||||
Depreciation and amortization | 9,527 | 7,899 | 18,658 | 15,433 | ||||||||||||
Total Expenses | 145,344 | 138,063 | 280,290 | 265,012 | ||||||||||||
Income from Operations | 35,894 | 23,034 | 80,366 | 57,032 | ||||||||||||
Interest expense | (3,204 | ) | (3,996 | ) | (6,713 | ) | (7,744 | ) | ||||||||
Interest income | 76 | 439 | 107 | 857 | ||||||||||||
Foreign currency transaction (loss) gain | (68 | ) | 14 | (72 | ) | 58 | ||||||||||
Income before Income Taxes | 32,698 | 19,491 | 73,688 | 50,203 | ||||||||||||
Provision for income taxes | 12,561 | 6,282 | 27,740 | 17,760 | ||||||||||||
Net Income | $ | 20,137 | $ | 13,209 | $ | 45,948 | $ | 32,443 | ||||||||
Earnings Per Share: | ||||||||||||||||
Basic | $ | 0.69 | $ | 0.44 | $ | 1.57 | $ | 1.09 | ||||||||
Diluted | $ | 0.67 | $ | 0.43 | $ | 1.53 | $ | 1.06 | ||||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 29,326 | 29,833 | 29,348 | 29,852 | ||||||||||||
Diluted | 30,094 | 30,557 | 30,103 | 30,579 | ||||||||||||
Dividends declared per common share | $ | 0.035 | $ | 0.035 | $ | 0.070 | $ | 0.070 | ||||||||
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES | |||||||||||||||||
FINANCIAL AND OPERATING DATA | |||||||||||||||||
($ in thousands unless otherwise noted) | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2008 | 2007 | 2008 | 2007 | ||||||||||||||
PAWN LENDING OPERATIONS: | |||||||||||||||||
Pawn loans | |||||||||||||||||
Annualized yield on pawn loans | 129.3 | % |
| 121.7 | % | 131.0 | % |
| 125.4 | % | |||||||
Total amount of pawn loans written and renewed | $ | 149,347 | $ | 129,334 | $ | 281,328 | $ | 239,956 | |||||||||
Average pawn loan balance outstanding | $ | 135,014 | $ | 122,546 | $ | 133,239 | $ | 121,591 | |||||||||
Average pawn loan balance per average location in operation | $ | 278 | $ | 256 | $ | 275 | $ | 254 | |||||||||
Ending pawn loan balance per location in operation | $ | 292 | $ | 274 | $ | 292 | $ | 274 | |||||||||
Average pawn loan amount at end of period (not in thousands) | $ | 119 | $ | 105 | $ | 119 | $ | 105 | |||||||||
Profit margin on disposition of merchandise as a percentage of proceeds from disposition of merchandise | 38.3 | % |
| 38.5 | % | 38.5 | % |
| 38.3 | % | |||||||
Average annualized merchandise turnover | 2.8 | x |
| 2.6 | x | 2.9 | x |
| 2.8 | x | |||||||
Average balance of merchandise held for disposition per average location in operation | $ | 194 | $ | 170 | $ | 198 | $ | 175 | |||||||||
Ending balance of merchandise held for disposition per location in operation | $ | 199 | $ | 174 | $ | 199 | $ | 174 | |||||||||
Pawnshop locations in operation – | |||||||||||||||||
Beginning of period, owned | 485 | 477 | 485 | 475 | |||||||||||||
Acquired | 1 | 2 | 1 | 3 | |||||||||||||
Start-ups | 1 | 2 | 1 | 3 | |||||||||||||
Combined or closed | - | (1 | ) | - | (1 | ) | |||||||||||
End of period, owned | 487 | 480 | 487 | 480 | |||||||||||||
Franchise locations at end of period | 14 | 12 | 14 | 12 | |||||||||||||
Total pawnshop locations at end of period | 501 | 492 | 501 | 492 | |||||||||||||
Average number of owned pawnshop locations | 486 | 479 | 485 | 478 | |||||||||||||
Cash advances (b) | |||||||||||||||||
Pawn locations offering cash advances at end of period | 432 | 429 | 432 | 429 | |||||||||||||
Average number of pawn locations offering cash advances | 431 | 427 | 431 | 426 | |||||||||||||
Amount of cash advances written at pawn locations: | |||||||||||||||||
Funded by the Company | $ | 14,182 | $ | 16,761 | $ | 28,129 | $ | 32,247 | |||||||||
Funded by third-party lenders (a) (d) | 37,779 | 46,891 | 75,775 | 91,876 | |||||||||||||
Aggregate amount of cash advances written at pawn locations (a) (f) | $ | 51,961 | $ | 63,652 | $ | 103,904 | $ | 124,123 | |||||||||
Number of cash advances written at pawn locations (not in thousands): | |||||||||||||||||
By the Company | 45,595 | 55,164 | 90,741 | 105,432 | |||||||||||||
By third-party lenders (a) (d) | 81,309 | 104,730 | 161,698 | 202,856 | |||||||||||||
Aggregate number of cash advances written at pawn locations(a) (f) | 126,904 | 159,894 | 252,439 | 308,288 | |||||||||||||
Cash advance customer balances due at pawn locations (gross): | |||||||||||||||||
Owned by Company (c) | $ | 7,216 | $ | 8,137 | $ | 7,216 | $ | 8,137 | |||||||||
Owned by third-party lenders (a)(d) | 7,205 | 9,183 | 7,205 | 9,183 | |||||||||||||
Aggregate cash advance customer balances due at pawn locations (gross) (a)(f) | $ | 14,421 | $ | 17,320 | $ | 14,421 | $ | 17,320 | |||||||||
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||||||||||||
FINANCIAL AND OPERATING DATA (Continued) | ||||||||||||||||
($ in thousands unless otherwise noted) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
CASH ADVANCE OPERATIONS (e): | ||||||||||||||||
Storefront operations: | ||||||||||||||||
Amount of cash advances written: | ||||||||||||||||
Funded by the Company | $ | 150,004 | $ | 177,661 | $ | 303,066 | $ | 335,417 | ||||||||
Funded by third-party lenders (a) (d) | 25,113 | 27,593 | 50,677 | 54,672 | ||||||||||||
Aggregate amount of cash advances written (a) (f) | $ | 175,117 | $ | 205,254 | $ | 353,743 | $ | 390,089 | ||||||||
Number of cash advances written (not in thousands): | ||||||||||||||||
By the Company | 426,605 | 496,404 | 845,202 | 925,355 | ||||||||||||
By third-party lenders (a) (d) | 45,347 | 53,974 | 91,056 | 104,337 | ||||||||||||
Aggregate number of cash advances written (a) (f) | 471,952 | 550,378 | 936,258 | 1,029,692 | ||||||||||||
Cash advance customer balances due (gross): | ||||||||||||||||
Owned by the Company (c) | $ | 41,470 | $ | 51,274 | $ | 41,470 | $ | 51,274 | ||||||||
Owned by third-party lenders (a) (d) | 4,368 | 5,115 | 4,368 | 5,115 | ||||||||||||
Aggregate cash advance customer balances due (gross) (a) (f) | $ | 45,838 | $ | 56,389 | $ | 45,838 | $ | 56,389 | ||||||||
Cash advance locations in operation (excluding online lending) – | ||||||||||||||||
Beginning of period | 304 | 296 | 304 | 295 | ||||||||||||
Start-ups | - | 1 | - | 3 | ||||||||||||
Combined or closed | (12 | ) | (1 | ) | (12 | ) | (2 | ) | ||||||||
End of period | 292 | 296 | 292 | 296 | ||||||||||||
Average number of cash advance locations | 300 | 296 | 301 | 295 | ||||||||||||
Internet lending operations: | ||||||||||||||||
Amount of cash advances written: | ||||||||||||||||
Funded by the Company | $ | 188,595 | $ | 149,284 | $ | 348,516 | $ | 277,778 | ||||||||
Funded by third-party lenders (a) (d) | 115,185 | 85,761 | 213,728 | 155,785 | ||||||||||||
Aggregate amount of cash advances written (a) (f) | $ | 303,780 | $ | 235,045 | $ | 562,244 | $ | 433,563 | ||||||||
Number of cash advances written (not in thousands): | ||||||||||||||||
By the Company | 441,466 | 387,209 | 830,882 | 716,524 | ||||||||||||
By third-party lenders (a) (d) | 175,634 | 153,954 | 324,581 | 281,691 | ||||||||||||
Aggregate number of cash advances written (a) (f) | 617,100 | 541,163 | 1,155,463 | 998,215 | ||||||||||||
Cash advance customer balances due (gross): | ||||||||||||||||
Owned by the Company (c) | $ | 64,207 | $ | 50,710 | $ | 64,207 | $ | 50,710 | ||||||||
Owned by third-party lenders (a) (d) | 21,187 | 15,157 | 21,187 | 15,157 | ||||||||||||
Aggregate cash advance customer balances due (gross) (a) (f) | $ | 85,394 | $ | 65,867 | $ | 85,394 | $ | 65,867 | ||||||||
Number of states with online lending at end of period | 33 | 30 | 33 | 30 | ||||||||||||
Number of foreign countries with online lending at end of period | 1 | - | 1 | - | ||||||||||||
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||||||||
FINANCIAL AND OPERATING DATA (Continued) | ||||||||||||
($ in thousands unless otherwise noted) | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||
June 30, | June 30, | |||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||
Combined Storefront and Internet lending operations: | ||||||||||||
Amount of cash advances written: | ||||||||||||
Funded by the Company | $ | 338,599 | $ | 326,945 | $ | 651,582 | $ | 613,195 | ||||
Funded by third-party lenders (a) (d) | 140,298 | 113,354 | 264,405 | 210,457 | ||||||||
Aggregate amount of cash advances written (a) (f) | $ | 478,897 | $ | 440,299 | $ | 915,987 | $ | 823,652 | ||||
Number of cash advances written (not in thousands): | ||||||||||||
By the Company | 868,071 | 883,613 | 1,676,084 | 1,641,879 | ||||||||
By third-party lenders (a) (d) | 220,981 | 207,928 | 415,637 | 386,028 | ||||||||
Aggregate number of cash advances written (a) (f) | 1,089,052 | 1,091,541 | 2,091,721 | 2,027,907 | ||||||||
Cash advance customer balances due (gross): | ||||||||||||
Owned by the Company (c) | $ | 105,677 | $ | 101,984 | $ | 105,677 | $ | 101,984 | ||||
Owned by third-party lenders (a) (d) | 25,555 | 20,272 | 25,555 | 20,272 | ||||||||
Aggregate cash advance customer balances due (gross) (a) (f) | $ | 131,232 | $ | 122,256 | $ | 131,232 | $ | 122,256 | ||||
CONSOLIDATED CASH ADVANCE PRODUCT SUMMARY (a) (b) (e): | ||||||||||||
Amount of cash advances written: | ||||||||||||
Funded by the Company | $ | 352,781 | $ | 343,706 | $ | 679,711 | $ | 645,442 | ||||
Funded by third-party lenders (a) (d) | 178,077 | 160,245 | 340,181 | 302,333 | ||||||||
Aggregate amount of cash advances written (a) (f) | $ | 530,858 | $ | 503,951 | $ | 1,019,892 | $ | 947,775 | ||||
Number of cash advances written (not in thousands): | ||||||||||||
By the Company | 913,666 | 938,777 | 1,766,825 | 1,747,311 | ||||||||
By third-party lenders (a) (d) | 302,290 | 312,658 | 577,335 | 588,884 | ||||||||
Aggregate number of cash advances written (a) (f) | 1,215,956 | 1,251,435 | 2,344,160 | 2,336,195 | ||||||||
Average amount per cash advance written (not in thousands): | ||||||||||||
By the Company | $ | 386 | $ | 366 | $ | 385 | $ | 369 | ||||
By third-party lenders (a) (d) | 589 | 513 | 589 | 513 | ||||||||
Aggregate average amount per cash advance (a) (f) | $ | 437 | $ | 403 | $ | 435 | $ | 406 | ||||
Cash advance customer balances due (gross): | ||||||||||||
Owned by the Company (c) | $ | 112,893 | $ | 110,121 | $ | 112,893 | $ | 110,121 | ||||
Owned by third-party lenders (a) (d) | 32,760 | 29,455 | 32,760 | 29,455 | ||||||||
Aggregate cash advance customer balances due (gross) (a) (f) | $ | 145,653 | $ | 139,576 | $ | 145,653 | $ | 139,576 | ||||
Total locations offering cash advances at end of period (excluding online lending) | 724 | 725 | 724 | 725 | ||||||||
Average total locations offering cash advances (excluding online lending) | 731 | 723 | 732 | 721 | ||||||||
Number of states with online lending at end of period | 33 | 30 | 33 | 30 | ||||||||
Number of foreign countries with online lending at end of period | 1 | - | 1 | - | ||||||||
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||||||||||
FINANCIAL AND OPERATING DATA (Continued) | ||||||||||||||
($ in thousands unless otherwise noted) | ||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
June 30, | June 30, | |||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||
CHECK CASHING OPERATIONS (Mr. Payroll): | ||||||||||||||
Centers in operation at end of year (not in thousands): | ||||||||||||||
Company-owned locations | 5 | 5 | 5 | 5 | ||||||||||
Franchised locations (a) | 130 | 135 | 130 | 135 | ||||||||||
Combined centers in operations at end of year (a) | 135 | 140 | 135 | 140 | ||||||||||
Revenue from Company-owned locations | $ | 102 | $ | 113 | $ | 224 | $ | 274 | ||||||
Revenue from franchise royalties and other | 736 | 745 | 1,634 | 1,724 | ||||||||||
Total revenue (c) | $ | 838 | $ | 858 | $ | 1,858 | $ | 1,998 | ||||||
Face amount of checks cashed: | ||||||||||||||
Company-owned locations | $ | 7,542 | $ | 8,212 | $ | 15,216 | $ | 17,822 | ||||||
Franchised locations (a) | 310,073 | 299,800 | 672,209 | 667,021 | ||||||||||
Combined face amount of checks cashed (a) | $ | 317,615 | $ | 308,012 | $ | 687,425 | $ | 684,843 | ||||||
Fees collected from customers: |
| |||||||||||||
Company-owned locations | $ | 102 | $ | 113 | $ | 224 | $ | 274 | ||||||
Franchised locations (a) | 4,297 | 4,130 | 9,667 | 9,576 | ||||||||||
Combined fees collected from customers (a) | $ | 4,399 | $ | 4,243 | $ | 9,891 | $ | 9,850 | ||||||
Fees as a percentage of checks cashed: | ||||||||||||||
Company-owned locations | 1.4 | % |
| 1.4 | % | 1.5 | % |
| 1.5 | % | ||||
Franchised locations (a) | 1.4 | 1.4 | 1.4 | 1.4 | ||||||||||
Combined fees as a percentage of checks cashed (a) | 1.4 | % |
| 1.4 | % | 1.4 | % |
| 1.4 | % | ||||
Average check cashed (not in thousands): | ||||||||||||||
Company-owned locations | $ | 400 | $ | 383 | $ | 408 | $ | 406 | ||||||
Franchised locations (a) | 440 | 413 | 478 | 454 | ||||||||||
Combined average check cashed (a) | $ | 439 | $ | 412 | $ | 476 | $ | 453 | ||||||
(a) 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. |
(b) Includes cash advance activities at the Company’s pawn lending locations. |
(c) Amounts recorded in the Company’s consolidated financial statements. |
(d) Cash advances written by third-party lenders that were arranged by the Company on behalf of the third-party lenders, all at the Company’s pawn locations, cash advance locations and through the internet distribution channel. |
(e) Includes cash advance activities at the Company’s cash advance storefront locations and through the Company’s internet distribution channel. |
(f) Includes (i) cash advances written by the Company, and (ii) cash advances written by third-party lenders that were 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 distribution channel. |
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||||||||||||
CONSOLIDATED CASH ADVANCES OUTSTANDING AND RELATED ALLOWANCE FOR LOSSES | ||||||||||||||||
(in thousands) | ||||||||||||||||
June 30, | ||||||||||||||||
2008 | 2007 | |||||||||||||||
Funded by the Company (a) | ||||||||||||||||
Active cash advances and fees receivable | $ | 71,590 | $ | 68,438 | ||||||||||||
Cash advances and fees in collection | 29,184 | 27,167 | ||||||||||||||
Total funded by the Company (a) | 100,774 | 95,605 | ||||||||||||||
Funded by third-party lenders (b) (c) | ||||||||||||||||
Active cash advances and fees receivable | 32,760 | 29,461 | ||||||||||||||
Cash advances and fees in collection | 12,119 | 14,510 | ||||||||||||||
Total funded by third-party lenders (b) (c) | 44,879 | 43,971 | ||||||||||||||
Combined gross portfolio (b) (d) | 145,653 | 139,576 | ||||||||||||||
Less: Elimination of cash advances owned by third-party lenders | 32,760 | 29,455 | ||||||||||||||
Company-owned cash advances and fees receivable, gross | 112,893 | 110,121 | ||||||||||||||
Less: Allowance for losses | 27,401 | 32,173 | ||||||||||||||
Cash advances and fees receivable, net | $ | 85,492 | $ | 77,948 | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Allowance for company-owned cash advances | ||||||||||||||||
Balance at beginning of period | $ | 20,815 | $ | 23,141 | $ | 25,676 | $ | 19,513 | ||||||||
Cash advance loss provision | 34,412 | 41,758 | 61,386 | 74,406 | ||||||||||||
Charge-offs | (34,859 | ) | (36,338 | ) | (75,681 | ) | (68,850 | ) | ||||||||
Recoveries | 7,033 | 3,612 | 16,020 | 7,104 | ||||||||||||
Balance at end of period | $ | 27,401 | $ | 32,173 | $ | 27,401 | $ | 32,173 | ||||||||
Accrual for third-party lender-owned cash advances | ||||||||||||||||
Balance at beginning of period | $ | 1,988 | $ | 1,253 | $ | 1,828 | $ | 1,153 | ||||||||
Increase in loss provision | 321 | 570 | 481 | 670 | ||||||||||||
Balance at end of period | $ | 2,309 | $ | 1,823 | $ | 2,309 | $ | 1,823 | ||||||||
Combined statistics (d) | ||||||||||||||||
Combined cash advance loss provision | $ | 34,733 | $ | 42,328 | $ | 61,867 | $ | 75,076 | ||||||||
Combined cash advance loss provision as a % of combined cash advances written (b) | 6.5 | % | 8.4 | % | 6.1 | % | 7.9 | % | ||||||||
Charge-offs (net of recoveries) as a % of combined cash advances written (b) | 5.2 | % | 6.5 | % | 5.8 | % | 6.5 | % | ||||||||
Combined allowance for losses and accrued third-party lender losses as a % of combined gross portfolio (b) | 20.4 | % | 24.4 | % | 21.3 | % | 24.4 | % | ||||||||
(a) Cash advances written by the Company for its own account in pawn locations, 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. |
(c) Cash advances written by third-party lenders that were arranged by the Company on behalf of the third-party lenders, all at the Company’s pawn locations, cash advance locations and through the internet distribution channel. |
(d) Includes (i) cash advances written by the Company, and (ii) cash advances written by third-party lenders that were 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 distribution channel. |
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||||||||
INCOME FROM OPERATIONS BY OPERATING SEGMENT | ||||||||||||
THREE MONTHS ENDED JUNE 30, 2008 AND 2007 | ||||||||||||
(in thousands) | ||||||||||||
Pawn Lending |
Cash Advance (1) | Check Cashing | Consolidated | |||||||||
Three months ended June 30, 2008: | ||||||||||||
Revenue | ||||||||||||
Finance and service charges | $ | 43,390 | $ | - | $ | - | $ | 43,390 | ||||
Proceeds from disposition of merchandise | 108,089 | - | - | 108,089 | ||||||||
Cash advance fees | 8,645 | 84,204 | - | 92,849 | ||||||||
Check cashing fees, royalties and other | 985 | 1,828 | 838 | 3,651 | ||||||||
Total revenue | 161,109 | 86,032 | 838 | 247,979 | ||||||||
Cost of revenue – disposed merchandise | 66,741 | - | - | 66,741 | ||||||||
Net revenue | 94,368 | 86,032 | 838 | 181,238 | ||||||||
Expenses | ||||||||||||
Operations | 51,910 | 27,727 | 309 | 79,946 | ||||||||
Cash advance loss provision | 2,677 | 32,056 | - | 34,733 | ||||||||
Administration | 11,465 | 9,338 | 335 | 21,138 | ||||||||
Depreciation and amortization | 5,939 | 3,527 | 61 | 9,527 | ||||||||
Total expenses | 71,991 | 72,648 | 705 | 145,344 | ||||||||
Income from operations | $ | 22,377 | $ | 13,384 | $ | 133 | $ | 35,894 | ||||
As of June 30, 2008: | ||||||||||||
Total assets | $ | 610,568 | $ | 406,255 | $ | 6,866 | $ | 1,023,689 | ||||
Goodwill | $ | 144,003 | $ | 254,573 | $ | 5,310 | $ | 403,886 | ||||
Three months ended June 30, 2007: | ||||||||||||
Revenue | ||||||||||||
Finance and service charges | $ | 37,194 | $ | - | $ | - | $ | 37,194 | ||||
Proceeds from disposition of merchandise | 85,808 | - | - | 85,808 | ||||||||
Cash advance fees | 9,990 | 76,957 | - | 86,947 | ||||||||
Check cashing fees, royalties and other | 810 | 2,264 | 858 | 3,932 | ||||||||
Total revenue | 133,802 | 79,221 | 858 | 213,881 | ||||||||
Cost of revenue – disposed merchandise | 52,784 | - | - | 52,784 | ||||||||
Net revenue | 81,018 | 79,221 | 858 | 161,097 | ||||||||
Expenses | ||||||||||||
Operations | 47,560 | 27,670 | 358 | 75,588 | ||||||||
Cash advance loss provision | 3,725 | 38,603 | - | 42,328 | ||||||||
Administration | 6,008 | 5,992 | 248 | 12,248 | ||||||||
Depreciation and amortization | 5,127 | 2,671 | 101 | 7,899 | ||||||||
Total expenses | 62,420 | 74,936 | 707 | 138,063 | ||||||||
Income from operations | $ | 18,598 | $ | 4,285 | $ | 151 | $ | 23,034 | ||||
As of June 30, 2007: | ||||||||||||
Total assets | $ | 557,180 | $ | 244,149 | $ | 6,995 | $ | 808,324 | ||||
Goodwill | $ | 142,590 | $ | 105,577 | $ | 5,310 | $ | 253,477 | ||||
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||||||||
INCOME FROM OPERATIONS BY OPERATING SEGMENT | ||||||||||||
SIX MONTHS ENDED JUNE 30, 2008 AND 2007 | ||||||||||||
(in thousands) | ||||||||||||
Pawn Lending |
Cash Advance (1) | Check Cashing | Consolidated | |||||||||
Six months ended June 30, 2008: | ||||||||||||
Revenue | ||||||||||||
Finance and service charges | $ | 86,811 | $ | - | $ | - | $ | 86,811 | ||||
Proceeds from disposition of merchandise | 224,672 | - | - | 224,672 | ||||||||
Cash advance fees | 17,930 | 160,379 | - | 178,309 | ||||||||
Check cashing fees, royalties and other | 1,998 | 5,265 | 1,858 | 9,121 | ||||||||
Total revenue | 331,411 | 165,644 | 1,858 | 498,913 | ||||||||
Cost of revenue – disposed merchandise | 138,257 | - | - | 138,257 | ||||||||
Net revenue | 193,154 | 165,644 | 1,858 | 360,656 | ||||||||
Expenses | ||||||||||||
Operations | 105,227 | 54,158 | 692 | 160,077 | ||||||||
Cash advance loss provision | 4,942 | 56,925 | - | 61,867 | ||||||||
Administration | 22,731 | 16,409 | 548 | 39,688 | ||||||||
Depreciation and amortization | 11,530 | 7,003 | 125 | 18,658 | ||||||||
Total expenses | 144,430 | 134,495 | 1,365 | 280,290 | ||||||||
Income from operations | $ | 48,724 | $ | 31,149 | $ | 493 | $ | 80,366 | ||||
Six months ended June 30, 2007: | ||||||||||||
Revenue | ||||||||||||
Finance and service charges | $ | 75,625 | $ | - | $ | - | $ | 75,625 | ||||
Proceeds from disposition of merchandise | 185,976 | - | - | 185,976 | ||||||||
Cash advance fees | 20,110 | 145,353 | - | 165,463 | ||||||||
Check cashing fees, royalties and other | 1,740 | 5,951 | 1,998 | 9,689 | ||||||||
Total revenue | 283,451 | 151,304 | 1,998 | 436,753 | ||||||||
Cost of revenue – disposed merchandise | 114,709 | - | - | 114,709 | ||||||||
Net revenue | 168,742 | 151,304 | 1,998 | 322,044 | ||||||||
Expenses | ||||||||||||
Operations | 95,476 | 52,613 | 665 | 148,754 | ||||||||
Cash advance loss provision | 6,569 | 68,507 | - | 75,076 | ||||||||
Administration | 14,530 | 10,694 | 525 | 25,749 | ||||||||
Depreciation and amortization | 10,134 | 5,097 | 202 | 15,433 | ||||||||
Total expenses | 126,709 | 136,911 | 1,392 | 265,012 | ||||||||
Income from operations | $ | 42,033 | $ | 14,393 | $ | 606 | $ | 57,032 | ||||
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES | |||||||||
INCOME FROM OPERATIONS BY OPERATING SEGMENT | |||||||||
THREE MONTHS ENDED JUNE 30, 2008 AND 2007 | |||||||||
(in thousands) | |||||||||
(1) The Cash Advance segment is comprised of two distribution channels for the same product, a multi-unit, “storefront” platform and an on-line, internet based lending platform. The following table summarizes the results from each channel’s contributions to the Cash Advance segment as of June 30, 2008 and 2007:
| |||||||||
Internet | Total Cash | ||||||||
Storefront | Lending | Advance | |||||||
Three months ended June 30, 2008: | |||||||||
Revenue | |||||||||
Cash advance fees | $ | 27,427 | $ | 56,777 | $ | 84,204 | |||
Check cashing fees, royalties and other | 1,824 | 4 | 1,828 | ||||||
Total revenue | 29,251 | 56,781 | 86,032 | ||||||
Expenses | |||||||||
Operations | 16,993 | 10,734 | 27,727 | ||||||
Cash advance loss provision | 6,664 | 25,392 | 32,056 | ||||||
Administration | 2,939 | 6,399 | 9,338 | ||||||
Depreciation and amortization | 2,380 | 1,147 | 3,527 | ||||||
Total expenses | 28,976 | 43,672 | 72,648 | ||||||
Income from operations | $ | 275 | $ | 13,109 | $ | 13,384 | |||
Three months ended June 30, 2007: | |||||||||
Revenue | |||||||||
Cash advance fees | $ | 31,250 | $ | 45,707 | $ | 76,957 | |||
Check cashing fees, royalties and other | 2,261 | 3 | 2,264 | ||||||
Total revenue | 33,511 | 45,710 | 79,221 | ||||||
Expenses | |||||||||
Operations | 17,435 | 10,235 | 27,670 | ||||||
Cash advance loss provision | 9,899 | 28,704 | 38,603 | ||||||
Administration | 2,850 | 3,142 | 5,992 | ||||||
Depreciation and amortization | 1,969 | 702 | 2,671 | ||||||
Total expenses | 32,153 | 42,783 | 74,936 | ||||||
Income from operations | $ | 1,358 | $ | 2,927 | $ | 4,285 | |||
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES | |||||||||
INCOME FROM OPERATIONS BY OPERATING SEGMENT | |||||||||
SIX MONTHS ENDED JUNE 30, 2008 AND 2007 | |||||||||
(in thousands) | |||||||||
Internet | Total Cash | ||||||||
Six Months Ended June 30, 2008: | Storefront | Lending | Advance | ||||||
Revenue | |||||||||
Cash advance fees | $ | 56,120 | $ | 104,259 | $ | 160,379 | |||
Check cashing fees, royalties and other | 5,261 | 4 | 5,265 | ||||||
Total revenue | 61,381 | 104,263 | 165,644 | ||||||
Expenses | |||||||||
Operations | 33,874 | 20,284 | 54,158 | ||||||
Cash advance loss provision | 11,010 | 45,915 | 56,925 | ||||||
Administration | 5,341 | 11,068 | 16,409 | ||||||
Depreciation and amortization | 4,805 | 2,198 | 7,003 | ||||||
Total expenses | 55,030 | 79,465 | 134,495 | ||||||
Income from operations | $ | 6,351 | $ | 24,798 | $ | 31,149 | |||
Six Months Ended June 30, 2007: | |||||||||
Revenue | |||||||||
Cash advance fees | $ | 60,991 | $ | 84,362 | $ | 145,353 | |||
Check cashing fees, royalties and other | 5,946 | 5 | 5,951 | ||||||
Total revenue | 66,937 | 84,367 | 151,304 | ||||||
Expenses | |||||||||
Operations | 33,345 | 19,268 | 52,613 | ||||||
Cash advance loss provision | 17,131 | 51,376 | 68,507 | ||||||
Administration | 5,155 | 5,539 | 10,694 | ||||||
Depreciation and amortization | 3,852 | 1,245 | 5,097 | ||||||
Total expenses | 59,483 | 77,428 | 136,911 | ||||||
Income from operations | $ | 7,454 | $ | 6,939 | $ | 14,393 |
CONTACT:
Cash America International, Inc.
Thomas A. Bessant, Jr., 817-335-1100