Exhibit 99.1
Cash America Second Quarter Net Income up 26% and Dividend Declared
FORT WORTH, Texas--(BUSINESS WIRE)--July 22, 2010--Cash America International, Inc. (NYSE: CSH) reported that its net income for the second quarter ended June 30, 2010 was up 26% to $20,889,000 (66 cents per share), which compares to the second quarter 2009 net income of $16,607,000 (54 cents per share). Contributing to the increase in earnings was volume growth in the Company’s e-commerce lending segment combined with another quarter of increased earnings and expanded profitability from its pawn lending activities in the United States.
Total revenue during the second quarter of 2010 was $292.1 million, up 16% from $252.4 million in the second quarter of 2009, due in part to a 37% increase in consumer loan fees during the period. Also contributing to the increase in total revenue was a 10% increase in pawn loan fees and service charges and a 3% increase in merchandise sales during the second quarter of 2010 as compared to the same period in 2009. The increase in merchandise sales was achieved with higher gross profit margins, leading to a 12% increase in profit from the sale of merchandise which positively affected earnings for the period.
Revenue from the Company’s consumer loan portfolio, reduced by loan loss provision increased 28%, to $70.9 million in the second quarter of 2010 compared to the prior year as consumer loans written in the quarter were up 35% and consumer loan balances were higher throughout the period. These increases combined with the increase in gross profit on the disposition of merchandise and increased revenue from pawn loans drove consolidated net revenue, net of loan losses, up 17%, to $176.7 million, which led to a 22% increase in income from operations in the second quarter of 2010 compared to the same period in 2009.
Commenting on the results of the quarter, Daniel R. Feehan, President and Chief Executive Officer of Cash America said, “Our Company has seen strong operating income growth in the retail services segment, primarily driven by our domestic pawn business, which is rebuilding loan balances following an abnormally high level of pawn redemptions in the first quarter of 2010. Additionally, consumer loan volumes in our e-commerce segment, both domestic and foreign, continue to significantly outpace growth of consumer loan volume in our U.S. storefronts and are building asset levels that should aid future earnings growth.”
For the first six months of fiscal year 2010, total revenue increased 16% to $605.1 million compared to $520.5 million for the same period in 2009. Income from operations through the second quarter of 2010 increased 26% to $95.6 million and Cash America posted a 31% increase in net income to $52,922,000 ($1.67 per share) for the first six months of fiscal year 2010 compared to $40,518,000 ($1.33 per share) for the same period in 2009.
During the second quarter of 2010, the Company renamed its Internet Services Division as the e-commerce Division and realigned its operating segments into two reportable segments: retail services and e-commerce. The retail services segment covers all of the operations of the Company’s Retail Services Division, which is comprised of both domestic and foreign storefront locations that offer pawn lending, consumer loans (formerly referred to as cash advances), check cashing and other ancillary services, and the e-commerce segment covers all of the operations of the Company’s e-commerce Division, which is comprised of the Company’s domestic and foreign online businesses and the Company’s micro line of credit services business (formerly referred to as card services). Certain amounts in the consolidated financial statements for the three and six months ended June 30, 2009 have been reclassified to conform to reflect the current segment structure. These reclassifications have no impact on consolidated results previously reported.
Cash America will host a conference call to discuss the second quarter results on Thursday, July 22, at 7:00 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 following the 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 18, 2010 to shareholders of record on August 4, 2010.
Outlook for the Third Quarter of 2010 and Related Fiscal Year
Management believes that the opportunities for 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 consumer loans and the disposition of unredeemed collateral by way of consumer spending on retail sales and the commercial sale of refined gold and diamonds. Other elements expected to affect the growth in revenue include the regulatory governance of consumer loan products and the development and growth of new markets for the Company’s e-commerce distribution platforms for consumer lending products, as well as growth of its pawn operations in Mexico. As the Company enters the third quarter of 2010, management anticipates that demand for the Company’s lending products will continue on a similar pace to the one we have experienced in the second quarter of 2010. Based on its views and on the preceding factors management expects the third quarter 2010 net income per share to be between 82 and 88 cents per share compared to 73 cents per share in the third quarter of 2009. In addition, management increases its previously reported expectations for its fiscal year 2010 to a range of between $3.65 and $3.75 per share, compared to $3.17 per share in fiscal 2009.
About the Company
As of June 30, 2010, Cash America International, Inc. had 1,062 total locations offering specialty financial services to consumers, which include 737 lending locations (including nine unconsolidated franchised locations) operating in 28 states in the United States under the names “Cash America Pawn,” “SuperPawn,” “Cash America Payday Advance,” and “Cashland,” 200 pawn lending locations, of which the Company is a majority owner, operating in 21 jurisdictions in central and southern Mexico under the name “Prenda Fácil.” In addition, the Company operated 120 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 June 30, 2010, the Company offered short-term loans over the Internet to customers in 33 states in the United States at http://www.cashnetusa.com, in the United Kingdom at http://www.quickquid.co.uk, in Australia at http://www.dollarsdirect.com.au, and in Canada at http://www.dollarsdirect.ca. The Company also owns a micro-line of credit services business that processes short-term loans on behalf of a third-party lender with balances outstanding in all 50 states and four other United States jurisdictions as of June 30, 2010.
For additional information regarding the Company and the services it provides, visit the Company’s websites located at:
http://www.cashamerica.com | http://www.quickquid.co.uk | ||||
http://www.enovafinancial.com | http://www.dollarsdirect.com.au | ||||
http://www.cashnetusa.com | http://www.dollarsdirect.ca | ||||
http://www.cashlandloans.com | http://www.strikegoldnow.com | ||||
http://www.primaryinnovations.net | http://www.mrpayroll.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 online loan 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 locations 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, the ability to successfully integrate newly acquired businesses into the Company’s operations, the loss of services of any of the Company’s executive officers, the effect of any current or future litigation proceedings on the Company, the effect of any of such changes on the Company’s business or the markets in which the Company operates 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 | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2010 | 2009 | 2010 | 2009 | ||||||||||||||
(Unaudited) | |||||||||||||||||
Consolidated Operations: | |||||||||||||||||
Total revenue | $ | 292,081 | $ | 252,381 | $ | 605,143 | $ | 520,473 | |||||||||
Net revenue | 221,664 | 180,847 | 444,781 | 366,437 | |||||||||||||
Total operating expenses | 182,526 | 148,647 | 349,204 | 290,758 | |||||||||||||
Income from operations | $ | 39,138 | $ | 32,200 | $ | 95,577 | $ | 75,679 | |||||||||
Income before income taxes | 33,846 | 27,385 | 84,699 | 65,674 | |||||||||||||
Net Income | $ | 20,911 | $ | 16,819 | $ | 52,962 | $ | 41,045 | |||||||||
Less: Net income attributable to the noncontrolling interest | (22 | ) | (212 | ) | $ | (40 | ) | $ | (527 | ) | |||||||
Net Income Attributable to Cash America International, Inc. | $ | 20,889 | $ | 16,607 | $ | 52,922 | $ | 40,518 | |||||||||
Earnings per share: | |||||||||||||||||
Net Income attributable to Cash America International, Inc. common stockholders: | |||||||||||||||||
Basic | $ | 0.70 | $ | 0.56 | $ | 1.78 | $ | 1.36 | |||||||||
Diluted | $ | 0.66 | $ | 0.54 | $ | 1.67 | $ | 1.33 | |||||||||
Weighted average shares: | |||||||||||||||||
Basic | 29,655 | 29,804 | 29,671 | 29,785 | |||||||||||||
Diluted | 31,665 | 30,515 | 31,701 | 30,467 |
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS | ||||||||||||
(in thousands, except per share data) | ||||||||||||
June 30, | December 31, | |||||||||||
2010 | 2009 | 2009 | ||||||||||
(Unaudited) | ||||||||||||
Assets | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 46,708 | $ | 26,323 | $ | 46,004 | ||||||
Pawn loans | 184,104 | 176,313 | 188,312 | |||||||||
Consumer loans, net | 115,295 | 89,810 | 108,789 | |||||||||
Merchandise held for disposition, net | 100,215 | 102,164 | 113,824 | |||||||||
Pawn loan fees service charges receivable | 35,077 | 33,314 | 36,544 | |||||||||
Prepaid expenses and other assets | 50,639 | 17,169 | 32,129 | |||||||||
Deferred tax assets | 25,035 | 21,644 | 21,536 | |||||||||
Total current assets | 557,073 | 466,737 | 547,138 | |||||||||
Property and equipment, net | 196,559 | 187,343 | 193,737 | |||||||||
Goodwill | 513,758 | 493,848 | 493,492 | |||||||||
Intangible assets, net | 25,853 | 30,454 | 27,793 | |||||||||
Other assets | 7,244 | 8,243 | 7,495 | |||||||||
Total assets | $ | 1,300,487 | $ | 1,186,625 | $ | 1,269,655 | ||||||
Liabilities and Equity | ||||||||||||
Current liabilities: | ||||||||||||
Accounts payable and accrued expenses | $ | 75,058 | $ | 66,534 | $ | 87,368 | ||||||
Accrued supplemental acquisition payment | 18,858 | - | 2,291 | |||||||||
Customer deposits | 9,535 | 9,778 | 8,837 | |||||||||
Income taxes currently payable | 9,150 | 1,324 | 8,699 | |||||||||
Current portion of long-term debt | 25,493 | 14,306 | 25,493 | |||||||||
Total current liabilities | 138,094 | 91,942 | 132,688 | |||||||||
Deferred tax liabilities | 46,016 | 38,763 | 42,590 | |||||||||
Noncurrent income tax payable | 2,166 | 4,059 | 2,009 | |||||||||
Other liabilities | 7,591 | 3,602 | 5,479 | |||||||||
Long-term debt | 374,044 | 415,491 | 403,690 | |||||||||
Total liabilities | 567,911 | $ | 553,857 | $ | 586,456 | |||||||
Equity: | ||||||||||||
Cash America International, Inc. 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 | 164,770 | 168,197 | 166,761 | |||||||||
Retained earnings | 583,660 | 478,706 | 532,805 | |||||||||
Accumulated other comprehensive income | 1,785 | 608 | 1,181 | |||||||||
Treasury shares, at cost (881,003 shares, 815,842 shares and 933,082 shares at June 30, 2010 and 2009, and at December 31, 2009, respectively) | ||||||||||||
(27,031 | ) | (23,256 | ) | (26,836 | ) | |||||||
Total Cash America International, Inc. stockholders’ equity | 726,208 | 627,279 | 676,935 | |||||||||
Noncontrolling interest | 6,368 | 5,489 | 6,264 | |||||||||
Total equity | 732,576 | 632,768 | 683,199 | |||||||||
Total liabilities and equity | $ | 1,300,487 | $ | 1,186,625 | $ | 1,269,655 |
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, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
(Unaudited) | ||||||||||||||||
Revenue | ||||||||||||||||
Pawn loan fees and service charges | $ | 59,507 | $ | 54,280 | $ | 117,788 | $ | 107,239 | ||||||||
Proceeds from disposition of merchandise | 113,850 | 110,173 | 255,733 | 239,933 | ||||||||||||
Consumer loan fees | 115,865 | 84,602 | 224,307 | 164,910 | ||||||||||||
Other | 2,859 | 3,326 | 7,315 | 8,391 | ||||||||||||
Total Revenue | 292,081 | 252,381 | 605,143 | 520,473 | ||||||||||||
Cost of Revenue | ||||||||||||||||
Disposed merchandise | 70,417 | 71,534 | 160,362 | 154,036 | ||||||||||||
Net Revenue | 221,664 | 180,847 | 444,781 | 366,437 | ||||||||||||
Expenses | ||||||||||||||||
Operations | 101,931 | 86,395 | 198,450 | 171,917 | ||||||||||||
Consumer loan loss provision | 44,934 | 29,178 | 78,827 | 53,952 | ||||||||||||
Administration | 25,446 | 22,681 | 50,994 | 44,155 | ||||||||||||
Depreciation and amortization | 10,215 | 10,393 | 20,933 | 20,734 | ||||||||||||
Total Expenses | 182,526 | 148,647 | 349,204 | 290,758 | ||||||||||||
Income from Operations | 39,138 | 32,200 | 95,577 | 75,679 | ||||||||||||
Interest expense | (5,406 | ) | (5,086 | ) | (10,863 | ) | (10,155 | ) | ||||||||
Interest income | 151 | 4 | 159 | 19 | ||||||||||||
Foreign currency transaction (loss) gain | (37 | ) | 267 | (174 | ) | 131 | ||||||||||
Income before Income Taxes | 33,846 | 27,385 | 84,699 | 65,674 | ||||||||||||
Provision for income taxes | 12,935 | 10,566 | 31,737 | 24,629 | ||||||||||||
Net Income | 20,911 | 16,819 | 52,962 | 41,045 | ||||||||||||
Less: Net income attributable to the noncontrolling interest | (22 | ) | (212 | ) | (40 | ) | (527 | ) | ||||||||
Net Income Attributable to Cash America International, Inc. | $ | 20,889 | $ | 16,607 | $ | 52,922 | $ | 40,518 | ||||||||
Earnings Per Share: | ||||||||||||||||
Net Income attributable to Cash America International, Inc. common stockholders: | ||||||||||||||||
Basic | $ | 0.70 | $ | 0.56 | $ | 1.78 | $ | 1.36 | ||||||||
Diluted | $ | 0.66 | $ | 0.54 | $ | 1.67 | $ | 1.33 | ||||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 29,655 | 29,804 | 29,671 | 29,785 | ||||||||||||
Diluted | 31,665 | 30,515 | 31,701 | 30,467 | ||||||||||||
Dividends declared per common share | $ | 0.035 | $ | 0.035 | $ | 0.070 | $ | 0.070 |
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES PAWN OPERATIONS – FINANCIAL AND OPERATING DATA (in thousands, except where otherwise noted) | ||||||||||||||||||||||||||||||||||||||||
The following table outlines certain data related to the Company’s pawn loan activities as of and for the three and six months ended June 30, 2010 and 2009. | ||||||||||||||||||||||||||||||||||||||||
As of June 30, | ||||||||||||||||||||||||||||||||||||||||
2010 | 2009 | |||||||||||||||||||||||||||||||||||||||
Ending pawn loan balances | $ | 162,104 | $ | 22,000 | $ | 184,104 | $ | 155,585 | $ | 20,728 | $ | 176,313 | ||||||||||||||||||||||||||||
Ending merchandise balance, net | $ | 100,215 | $ | - | $ | 100,215 | $ | 102,164 | $ | - | $ | 102,164 | ||||||||||||||||||||||||||||
Three Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||
2010 | 2009 | |||||||||||||||||||||||||||||||||||||||
Domestic | Foreign | Total | Domestic | Foreign | Total | |||||||||||||||||||||||||||||||||||
Average pawn loan balance outstanding | $ | 148,998 | $ | 23,039 | $ | 172,037 | $ | 142,770 | $ | 19,113 | $ | 161,883 | ||||||||||||||||||||||||||||
Amount of pawn loans written and renewed | $ | 167,939 | $ | 24,950 | $ | 192,889 | $ | 160,249 | $ | 19,305 | $ | 179,554 | ||||||||||||||||||||||||||||
Annualized yield on pawn loans | 137.5 | % | 146.7 | % | 138.7 | % | 133.1 | % | 145.3 | % | 134.5 | % | ||||||||||||||||||||||||||||
Gross profit margin on disposition of merchandise | 38.1 | % | - | 38.1 | % | 35.1 | % | - | 35.1 | % | ||||||||||||||||||||||||||||||
Merchandise turnover | 2.9 | - | 2.9 | 2.8 | - | 2.8 | ||||||||||||||||||||||||||||||||||
Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||
2010 | 2009 | |||||||||||||||||||||||||||||||||||||||
Domestic | Foreign | Total | Domestic | Foreign | Total | |||||||||||||||||||||||||||||||||||
Average pawn loan balance outstanding | $ | 150,389 | $ | 22,973 | $ | 173,362 | $ | 142,325 | $ | 17,871 | $ | 160,196 | ||||||||||||||||||||||||||||
Amount of pawn loans written and renewed | $ | 309,974 | $ | 45,979 | $ | 355,953 | $ | 296,353 | $ | 26,226 | $ | 322,579 | ||||||||||||||||||||||||||||
Annualized yield on pawn loans | 136.7 | % | 139.1 | % | 137.0 | % | 133.0 | % | 151.1 | % | 135.0 | % | ||||||||||||||||||||||||||||
Gross profit margin on disposed merchandise | 37.3 | % | - | 37.3 | % | 35.8 | % | - | 35.8 | % | ||||||||||||||||||||||||||||||
Merchandise turnover | 3.1 | - | 3.1 | 3.0 | - | 3.0 |
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES MERCHANDISE DISPOSITION, GROSS PROFIT AND INVENTORY OPERATING DATA (in thousands) | ||||||||||||||||||||||||||||||||||
Profit from the disposition of merchandise represents the proceeds received from the disposition of merchandise in excess of the cost of disposed merchandise. Retail sales include the sale of merchandise direct to consumers through any of the Company’s retail services locations. Commercial sales include the sale of refined gold, platinum and diamonds to refiners, brokers or manufacturers. The following table summarizes the proceeds from the disposition of merchandise and the related profit for the three and six months ended June 30, 2010 and 2009. | ||||||||||||||||||||||||||||||||||
Three Months Ended June 30, | ||||||||||||||||||||||||||||||||||
2010 | 2009 | |||||||||||||||||||||||||||||||||
Retail | Commercial | Total | Retail | Commercial | Total | |||||||||||||||||||||||||||||
Proceeds from disposition | $ | 64,029 | $ | 49,821 | $ | 113,850 | $ | 62,402 | $ | 47,771 | $ | 110,173 | ||||||||||||||||||||||
Gross profit on disposition | $ | 26,413 | $ | 17,020 | $ | 43,433 | $ | 25,729 | $ | 12,910 | $ | 38,639 | ||||||||||||||||||||||
Gross profit margin | 41.3 | % | 34.2 | % | 38.1 | % | 41.2 | % | 27.0 | % | 35.1 | % | ||||||||||||||||||||||
Percentage of total gross profit | 60.8 | % | 39.2 | % | 100.0 | % | 66.6 | % | 33.4 | % | 100.0 | % | ||||||||||||||||||||||
Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
2010 | 2009 | |||||||||||||||||||||||||||||||||
Retail | Commercial | Total | Retail | Commercial | Total | |||||||||||||||||||||||||||||
Proceeds from disposition | $ | 150,172 | $ | 105,561 | $ | 255,733 | $ | 142,485 | $ | 97,448 | $ | 239,933 | ||||||||||||||||||||||
Gross profit on disposition | $ | 59,903 | $ | 35,468 | $ | 95,371 | $ | 57,877 | $ | 28,020 | $ | 85,897 | ||||||||||||||||||||||
Gross profit margin | 39.9 | % | 33.6 | % | 37.3 | % | 40.6 | % | 28.8 | % | 35.8 | % | ||||||||||||||||||||||
Percentage of total gross profit | 62.8 | % | 37.2 | % | 100.0 | % | 67.4 | % | 32.6 | % | 100.0 | % |
The table below summarizes the age of merchandise held for disposition before valuation allowance of $0.7 million at June 30, 2010 and 2009 (dollars in thousands).
Balance at June 30, | ||||||||||||||
2010 | 2009 | |||||||||||||
Amount | % | Amount | % | |||||||||||
Merchandise held for 1 year or less – | ||||||||||||||
Jewelry | $ | 65,112 | 64.5 | % | $ | 66,882 | 65.0 | % | ||||||
Other merchandise | 28,525 | 28.3 | 27,948 | 27.2 | ||||||||||
Total merchandise held for 1 year or less | 93,637 | 92.8 | 94,830 | 92.2 | ||||||||||
Merchandise held for more than 1 year – | ||||||||||||||
Jewelry | 4,294 | 4.3 | 5,080 | 4.9 | ||||||||||
Other merchandise | 2,984 | 3.0 | 2,954 | 2.9 | ||||||||||
Total merchandise held for more than 1 year | 7,278 | 7.2 | 8,034 | 7.8 | ||||||||||
Total merchandise held for disposition | $ | 100,915 | 100.0 | % | $ | 102,864 | 100.0 | % |
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSUMER LOAN FINANCIAL AND OPERATING DATA (in thousands, except where otherwise noted) | ||||||||||||||||||
As of June 30, | ||||||||||||||||||
2010 | 2009 | |||||||||||||||||
Company Owned | Guaranteed by the Company (a)(b) | Total (a)(b) | Company Owned | Guaranteed by the Company (a)(b) | Total (a)(b) | |||||||||||||
Ending consumer loan balances: | ||||||||||||||||||
Retail Services | $ | 45,008 | $ | 9,536 | $ | 54,544 | $ | 45,873 | $ | 10,189 | $ | 56,062 | ||||||
Internet Lending | 88,818 | 41,477 | 130,295 | 60,855 | 23,497 | 84,352 | ||||||||||||
MLOC(c) | 18,192 | - | 18,192 | 5,245 | - | 5,245 | ||||||||||||
Total ending loan balance, gross | $ | 152,018 | $ | 51,013 | $ | 203,031 | $ | 111,973 | $ | 33,686 | $ | 145,659 | ||||||
Less: Allowance for losses | (36,723) | (3,325) | (40,048) | (22,163) | (2,059) | (24,222) | ||||||||||||
Total ending loan balance, net | $ | 115,295 | $ | 47,688 | $ | 162,983 | $ | 89,810 | $ | 31,627 | $ | 121,437 | ||||||
Three Months Ended June 30, | ||||||||||||||||||
2010 | 2009 | |||||||||||||||||
Company Owned | Guaranteed by the Company (a)(b) | Total (a)(b) | Company Owned | Guaranteed by the Company (a)(b) | Total (a)(b) | |||||||||||||
Amount of consumer loans written: | ||||||||||||||||||
Retail Services | $ | 168,919 | $ | 48,147 | $ | 217,066 | $ | 164,874 | $ | 50,867 | $ | 215,741 | ||||||
Internet Lending | 208,849 | 200,239 | 409,088 | 176,082 | 116,190 | 292,272 | ||||||||||||
MLOC(c) | 92,309 | - | 92,309 | 23,290 | - | 23,290 | ||||||||||||
Total consumer loans written | $ | 470,077 | $ | 248,386 | $ | 718,463 | $ | 364,246 | $ | 167,057 | $ | 531,303 | ||||||
Average amount per consumer loan: | ||||||||||||||||||
Retail Services | $ | 434 | $ | 569 | $ | 458 | $ | 429 | $ | 554 | $ | 453 | ||||||
Internet Lending | 407 | 673 | 505 | 408 | 727 | 495 | ||||||||||||
MLOC(c) | 198 | - | 198 | 148 | - | 148 | ||||||||||||
Combined | $ | 344 | $ | 650 | $ | 411 | $ | 374 | $ | 664 | $ | 428 | ||||||
Six Months Ended June 30, | ||||||||||||||||||
2010 | 2009 | |||||||||||||||||
Company Owned | Guaranteed by the Company (a)(b) | Total (a)(b) | Company Owned | Guaranteed by the Company (a)(b) | Total (a)(b) | |||||||||||||
Amount of consumer loans written: | ||||||||||||||||||
Retail Services | $ | 329,375 | $ | 96,217 | $ | 425,592 | $ | 316,511 | $ | 101,745 | $ | 418,256 | ||||||
Internet Lending | 393,503 | 377,720 | 771,223 | 335,546 | 222,353 | 557,899 | ||||||||||||
MLOC(c) | 166,898 | - | 166,898 | 41,099 | - | 41,099 | ||||||||||||
Total consumer loans written | $ | 889,776 | $ | 473,937 | $ | 1,363,713 | $ | 693,156 | $ | 324,098 | $ | 1,017,254 | ||||||
Average amount per consumer loan: | ||||||||||||||||||
Retail Services | $ | 437 | $ | 574 | $ | 462 | $ | 430 | $ | 557 | $ | 455 | ||||||
Internet Lending | 410 | 687 | 511 | 407 | 733 | 495 | ||||||||||||
MLOC(c) | 197 | - | 197 | 152 | - | 152 | ||||||||||||
Combined | $ | 347 | $ | 661 | $ | 416 | $ | 379 | $ | 667 | $ | 434 | ||||||
(a) Non-Generally Accepted Accounting Principles (“GAAP”) presentation. Management evaluates the consumer loan 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 Generally Accepted Accounting Principles amount through the presentation of the financial information above. | ||||||||||||||||||
(b) Consumer loans written by third-party lenders that were processed or arranged by the Company on behalf of the third-party lenders at the Company’s retail services locations and through the Company’s internet lending activities in its online channel. | ||||||||||||||||||
(c) For the micro line of credit (“MLOC”) services channel, the Company purchases a participation interest in receivables originated by a third-party lender; consumer loans written includes only the amount of the Company’s participation interest in these loans. | ||||||||||||||||||
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSUMER LOAN FINANCIAL AND OPERATING DATA (in thousands, except where otherwise noted) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | ||||||||||||
Allowance for losses for Company-owned consumer loans: | ||||||||||||||||
Balance at beginning of period | $ | 25,823 | $ | 17,278 | $ | 27,350 | $ | 21,495 | ||||||||
Consumer loan loss provision | 43,902 | 28,641 | 78,446 | 54,028 | ||||||||||||
Charge-offs | (38,591 | ) | (28,215 | ) | (82,833 | ) | (63,141 | ) | ||||||||
Recoveries | 5,589 | 4,459 | 13,760 | 9,781 | ||||||||||||
Balance at end of period | $ | 36,723 | $ | 22,163 | $ | 36,723 | $ | 22,163 | ||||||||
Accrual for third-party lender-owned consumer loans: | ||||||||||||||||
Balance at beginning of period | $ | 2,293 | $ | 1,522 | $ | 2,944 | $ | 2,135 | ||||||||
Increase (decrease) in loss provision | 1,032 | 537 | 381 | (76 | ) | |||||||||||
Balance at end of period | $ | 3,325 | $ | 2,059 | $ | 3,325 | $ | 2,059 | ||||||||
Combined consumer loan loss provision as a % of combined consumer loans written (a) | ||||||||||||||||
6.3 | % | 5.5 | % | 5.8 | % | 5.3 | % | |||||||||
Charge-offs (net of recoveries) as a % of combined consumer loans written (a) | ||||||||||||||||
4.6 | % | 4.5 | % | 5.1 | % | 5.2 | % | |||||||||
Combined allowance for losses and accrued third-party lender losses as a % of combined gross portfolio (a) | ||||||||||||||||
19.7 | % | 16.6 | % | 19.7 | % | 16.6 | % | |||||||||
(a) Non-GAAP presentation. Management evaluates the consumer loan portfolio on an aggregate basis including its evaluation of the loss provision for the Company-owned portfolio and the third-party lender-owned portfolio that the Company guarantees. Includes (i) consumer loans written by the Company, and (ii) consumer loans written by third-party lenders that were processed or arranged by the Company on behalf of the third-party lenders through the CSO program, all at the Company’s retail services locations and through the Company’s online channel, and (iii) the Company's participation interests in consumer loans written by a third-party lender that are purchased by the Company through the Company’s MLOC services channel. For the MLOC services channel, consumer loans written includes only the amount of the Company’s participation interest in these loans. |
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES INCOME FROM OPERATIONS BY OPERATING SEGMENT (in thousands) | ||||||||||||||||||||||
The following tables set forth income from operations for the Company’s operating segments, which are retail services and e-commerce, as of and for the three and six months ended June 30, 2010 and 2009. | ||||||||||||||||||||||
Retail Services(1) | E-Commerce(2) | |||||||||||||||||||||
Domestic | Foreign | Total | Domestic | Foreign | Total | Consolidated | ||||||||||||||||
Three Months Ended June 30, 2010 | ||||||||||||||||||||||
Revenue | ||||||||||||||||||||||
Pawn loan fees and service charges | $ | 51,080 | $ | 8,427 | $ | 59,507 | $ | - | $ | - | $ | - | $ | 59,507 | ||||||||
Proceeds from disposition of merchandise | 113,850 | - | 113,850 | - | - | - | 113,850 | |||||||||||||||
Consumer loan fees | 26,782 | - | 26,782 | 67,277 | 21,806 | 89,083 | 115,865 | |||||||||||||||
Other | 2,616 | 41 | 2,657 | 202 | - | 202 | 2,859 | |||||||||||||||
Total revenue | 194,328 | 8,468 | 202,796 | 67,479 | 21,806 | 89,285 | 292,081 | |||||||||||||||
Cost of revenue – disposed merchandise | 70,417 | - | 70,417 | - | - | - | 70,417 | |||||||||||||||
Net revenue | 123,911 | 8,468 | 132,379 | 67,479 | 21,806 | 89,285 | 221,664 | |||||||||||||||
Expenses | ||||||||||||||||||||||
Operations | 72,955 | 4,665 | 77,620 | 16,634 | 7,677 | 24,311 | 101,931 | |||||||||||||||
Consumer loan loss provision | 5,019 | - | 5,019 | 29,466 | 10,449 | 39,915 | 44,934 | |||||||||||||||
Administration | 10,926 | 2,194 | 13,120 | 8,948 | 3,378 | 12,326 | 25,446 | |||||||||||||||
Depreciation and amortization | 6,954 | 1,231 | 8,185 | 1,959 | 71 | 2,030 | 10,215 | |||||||||||||||
Total expenses | 95,854 | 8,090 | 103,944 | 57,007 | 21,575 | 78,582 | 182,526 | |||||||||||||||
Income (loss) from operations | $ | 28,057 | $ | 378 | $ | 28,435 | $ | 10,472 | $ | 231 | $ | 10,703 | $ | 39,138 | ||||||||
As of June 30, 2010 | ||||||||||||||||||||||
Total assets | $ | 800,774 | $ | 119,137 | $ | 919,911 | $ | 332,809 | $ | 47,767 | $ | 380,576 | $ | 1,300,487 | ||||||||
Goodwill | $ | 303,476 | $ | 210,282 | $ | 513,758 | ||||||||||||||||
Retail Services(1) | E-Commerce(2) | |||||||||||||||||||||
Domestic | Foreign | Total | Domestic | Foreign | Total | Consolidated | ||||||||||||||||
Three Months Ended June 30, 2009 | ||||||||||||||||||||||
Revenue | ||||||||||||||||||||||
Pawn loan fees and service charges | $ | 47,373 | $ | 6,907 | $ | 54,280 | $ | - | $ | - | $ | - | $ | 54,280 | ||||||||
Proceeds from disposition of merchandise | 110,173 | - | 110,173 | - | - | - | 110,173 | |||||||||||||||
Consumer loan fees | 27,330 | - | 27,330 | 49,715 | 7,557 | 57,272 | 84,602 | |||||||||||||||
Other | 2,871 | 65 | 2,936 | 390 | - | 390 | 3,326 | |||||||||||||||
Total revenue | 187,747 | 6,972 | 194,719 | 50,105 | 7,557 | 57,662 | 252,381 | |||||||||||||||
Cost of revenue – disposed merchandise | 71,534 | - | 71,534 | - | - | - | 71,534 | |||||||||||||||
Net revenue | 116,213 | 6,972 | 123,185 | 50,105 | 7,557 | 57,662 | 180,847 | |||||||||||||||
Expenses | ||||||||||||||||||||||
Operations | 70,071 | 3,127 | 73,198 | 10,186 | 3,011 | 13,197 | 86,395 | |||||||||||||||
Consumer loan loss provision | 4,558 | - | 4,558 | 21,026 | 3,594 | 24,620 | 29,178 | |||||||||||||||
Administration | 12,147 | 1,574 | 13,721 | 8,065 | 895 | 8,960 | 22,681 | |||||||||||||||
Depreciation and amortization | 7,621 | 903 | 8,524 | 1,860 | 9 | 1,869 | 10,393 | |||||||||||||||
Total expenses | 94,397 | 5,604 | 100,001 | 41,137 | 7,509 | 48,646 | 148,647 | |||||||||||||||
Income (loss) from operations | $ | 21,816 | $ | 1,368 | $ | 23,184 | $ | 8,968 | $ | 48 | $ | 9,016 | $ | 32,200 | ||||||||
As of June 30, 2009 | ||||||||||||||||||||||
Total assets | $ | 782,367 | $ | 111,207 | $ | 893,574 | $ | 277,243 | $ | 15,808 | $ | 293,051 | $ | 1,186,625 | ||||||||
Goodwill | $ | 298,370 | $ | 195,478 | $ | 493,848 |
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES INCOME FROM OPERATIONS BY OPERATING SEGMENT (in thousands) | |||||||||||||||||||||||||
Retail Services(1) | E-Commerce(2) | ||||||||||||||||||||||||
Domestic | Foreign | Total | Domestic | Foreign | Total | Consolidated | |||||||||||||||||||
Six Months Ended June 30, 2010 | |||||||||||||||||||||||||
Revenue | |||||||||||||||||||||||||
Pawn loan fees and service charges | $ | 101,942 | $ | 15,846 | $ | 117,788 | $ | - | $ | - | $ | - | $ | 117,788 | |||||||||||
Proceeds from disposition of merchandise | 255,733 | - | 255,733 | - | - | - | 255,733 | ||||||||||||||||||
Consumer loan fees | 54,326 | - | 54,326 | 129,911 | 40,070 | 169,981 | 224,307 | ||||||||||||||||||
Other | 6,723 | 74 | 6,797 | 518 | - | 518 | 7,315 | ||||||||||||||||||
Total revenue | 418,724 | 15,920 | 434,644 | 130,429 | 40,070 | 170,499 | 605,143 | ||||||||||||||||||
Cost of revenue – disposed merchandise | 160,362 | - | 160,362 | - | - | - | 160,362 | ||||||||||||||||||
Net revenue | 258,362 | 15,920 | 274,282 | 130,429 | 40,070 | 170,499 | 444,781 | ||||||||||||||||||
Expenses | |||||||||||||||||||||||||
Operations | 146,053 | 8,408 | 154,461 | 30,413 | 13,576 | 43,989 | 198,450 | ||||||||||||||||||
Consumer loan loss provision | 8,005 | - | 8,005 | 52,879 | 17,943 | 70,822 | 78,827 | ||||||||||||||||||
Administration | 23,382 | 4,173 | 27,555 | 17,200 | 6,239 | 23,439 | 50,994 | ||||||||||||||||||
Depreciation and amortization | 14,498 | 2,374 | 16,872 | 3,931 | 130 | 4,061 | 20,933 | ||||||||||||||||||
Total expenses | 191,938 | 14,955 | 206,893 | 104,423 | 37,888 | 142,311 | 349,204 | ||||||||||||||||||
Income from operations | $ | 66,424 | $ | 965 | $ | 67,389 | $ | 26,006 | $ | 2,182 | $ | 28,188 | $ | 95,577 | |||||||||||
As of June 30, 2010 | |||||||||||||||||||||||||
Total assets | $ | 800,774 | $ | 119,137 | $ | 919,911 | $ | 332,809 | $ | 47,767 | $ | 380,576 | $ | 1,300,487 | |||||||||||
Goodwill | $ | 303,476 | $ | 210,282 | $ | 513,758 | |||||||||||||||||||
Retail Services(1) | E-Commerce(2) | ||||||||||||||||||||||||
Domestic | Foreign | Total | Domestic | Foreign | Total | Consolidated | |||||||||||||||||||
Six Months Ended June 30, 2009 | |||||||||||||||||||||||||
Revenue | |||||||||||||||||||||||||
Pawn loan fees and service charges | $ | 93,869 | $ | 13,370 | $ | 107,239 | $ | - | $ | - | $ | - | $ | 107,239 | |||||||||||
Proceeds from disposition of merchandise | 239,933 | - | 239,933 | - | - | - | 239,933 | ||||||||||||||||||
Consumer loan fees | 54,042 | - | 54,042 | 97,555 | 13,313 | 110,868 | 164,910 | ||||||||||||||||||
Other | 7,657 | 134 | 7,791 | 600 | - | 600 | 8,391 | ||||||||||||||||||
Total revenue | 395,501 | 13,504 | 409,005 | 98,155 | 13,313 | 111,468 | 520,473 | ||||||||||||||||||
Cost of revenue – disposed merchandise | 154,036 | - | 154,036 | - | - | - | 154,036 | ||||||||||||||||||
Net revenue | 241,465 | 13,504 | 254,969 | 98,155 | 13,313 | 111,468 | 366,437 | ||||||||||||||||||
Expenses | |||||||||||||||||||||||||
Operations | 140,959 | 5,538 | 146,497 | 20,331 | 5,089 | 25,420 | 171,917 | ||||||||||||||||||
Consumer loan loss provision | 8,442 | - | 8,442 | 38,822 | 6,688 | 45,510 | 53,952 | ||||||||||||||||||
Administration | 24,778 | 3,054 | 27,832 | 14,475 | 1,848 | 16,323 | 44,155 | ||||||||||||||||||
Depreciation and amortization | 15,408 | 1,731 | 17,139 | 3,577 | 18 | 3,595 | 20,734 | ||||||||||||||||||
Total expenses | 189,587 | 10,323 | 199,910 | 77,205 | 13,643 | 90,848 | 290,758 | ||||||||||||||||||
Income (loss) from operations | $ | 51,878 | $ | 3,181 | $ | 55,059 | $ | 20,950 | $ | (330 | ) | $ | 20,620 | $ | 75,679 | ||||||||||
As of June 30, 2009 | |||||||||||||||||||||||||
Total assets | $ | 782,367 | $ | 111,207 | $ | 893,574 | $ | 277,243 | $ | 15,808 | $ | 293,051 | $ | 1,186,625 | |||||||||||
Goodwill | $ | 298,370 | $ | $ | 195,478 | $ | 493,848 | ||||||||||||||||||
(1 | ) | The retail services segment is composed of the Company’s domestic and foreign storefront operations. | |||||||||||||||||||||||
(2 | ) | The e-commerce segment is composed of the Company’s online channel, which has domestic and foreign operations, and the Company’s MLOC services channel. |
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES ADJUSTED EARNINGS PER SHARE | |||||||||||||||||||||||||||||
Adjusted Earnings Per Share
In addition to reporting financial results in accordance with GAAP, the Company has provided adjusted earnings and adjusted earnings per share, which are non-GAAP measures. Management believes these measures are useful to help investors better understand the Company’s financial performance, competitive position and prospects for the future. These non-GAAP measures are used by management in evaluating the Company’s results of operations. The following table provides reconciliation between net income attributable to the Company and diluted earnings per share calculated in accordance with GAAP to adjusted earnings and adjusted earnings per share, respectively (dollars in thousands except per share data): | |||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||||
2010 | 2009 | 2010 | 2009 | ||||||||||||||||||||||||||
$ | Per Share | $ | Per Share | $ | Per Share | $ | Per Share | ||||||||||||||||||||||
Net income attributable to Cash America International, Inc. | $ | 20,889 | $ | 0.66 | $ | 16,607 | $ | 0.54 | $ | 52,922 | $ | 1.67 | $ | 40,518 | $ | 1.33 | |||||||||||||
Adjustments: | |||||||||||||||||||||||||||||
Intangible asset amortization, net of tax | 664 | 0.02 | 957 | 0.03 | 1,417 | 0.04 | 1,988 | 0.07 | |||||||||||||||||||||
Non-cash equity-based compensation, net of tax | 602 | 0.02 | 510 | 0.02 | 1,178 | 0.04 | 987 | 0.03 | |||||||||||||||||||||
Convertible debt non-cash interest and issuance cost amortization, net of tax | 512 | 0.02 | 223 | 0.01 | 1,027 | 0.04 | 228 | - | |||||||||||||||||||||
Foreign exchange loss (gain), net of tax | 23 | - | (164 | ) | (0.01 | ) | 109 | - | (82 | ) | - | ||||||||||||||||||
Adjusted earnings | $ | 22,690 | $ | 0.72 | $ | 18,133 | $ | 0.59 | $ | 56,653 | $ | 1.79 | $ | 43,639 | $ | 1.43 |
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES LOCATION INFORMATION | ||||||||||||||||||
Retail Services Segment
The following table sets forth the number of domestic and foreign locations in the Company’s retail services segment offering pawn lending, consumer lending, and other services as of June 30, 2010 and 2009. | ||||||||||||||||||
As of June 30, | ||||||||||||||||||
2010 | 2009 | |||||||||||||||||
Domestic(a) | Foreign(c)(d) | (b)Total | Domestic(a) | Foreign(c) | Total | |||||||||||||
Retail services locations offering: | ||||||||||||||||||
Both pawn and consumer lending | 573 | - | 573 | 542 | - | 542 | ||||||||||||
Pawn lending only | 76 | 200 | 276 | 70 | 146 | 216 | ||||||||||||
Consumer lending only | 88 | - | 88 | 137 | - | 137 | ||||||||||||
Other(e) | 125 | - | 125 | 128 | - | 128 | ||||||||||||
Total retail services | 862 | 200 | 1,062 | 877 | 146 | 1,023 | ||||||||||||
(a) Includes locations that operate under the names “Cash America Pawn,” “SuperPawn,” “Cash America Payday Advance” and “Cashland.” Includes nine unconsolidated franchised pawn locations. | ||||||||||||||||||
(b) Includes locations that operate in 28 states in the United States. | ||||||||||||||||||
(c) Includes locations that operate in central and southern Mexico under the name “Prenda Fácil” (referred to as “Prenda Fácil”), of which the Company is a majority owner. | ||||||||||||||||||
(d) Includes locations that operate in 21 jurisdictions in Mexico. | ||||||||||||||||||
(e) Includes check cashing locations operating in the United States under the name “Mr. Payroll.” This amount represents five consolidated Company-owned check cashing locations operating in one state and includes 120 unconsolidated franchised locations operating in 17 states. |
E-Commerce Segment
As of June 30, 2010, the Company’s e-commerce operating segment offered consumer loans over the internet to customers in:
- 33 states in the United States at http://www.cashnetusa.com,
- in the United Kingdom at http://www.quickquid.co.uk,
- in Australia at http://www.dollarsdirect.com.au, and
- in Canada at http://www.dollarsdirect.ca.
The e-commerce segment also includes the Company’s MLOC services channel, which processes MLOC advances on behalf of a third-party lender and had a participation interest in MLOC receivables that were outstanding in all 50 states and four other U.S. jurisdictions.
Non-GAAP Disclosure
In addition to the financial information prepared in conformity with GAAP, the Company provides historical non-GAAP financial information. 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.
CONTACT:
Cash America International, Inc.
Thomas A. Bessant, Jr., 817-335-1100