Exhibit 99.1
Cash America First Quarter Net Income Increases 14% and Declares Dividend
FORT WORTH, Texas--(BUSINESS WIRE)--April 21, 2011--Cash America International, Inc. (NYSE: CSH) announced today that net income attributable to the Company for the first quarter ended March 31, 2011 increased 14% to $36,378,000 ($1.13 per share) compared to net income of $32,033,000 ($1.01 per share) for the same period in 2010. Earnings per share for the first three months of 2011 exceeded the high end of management’s publicly released expectation of $1.10 per share for the first quarter, as reported in the Company’s press release dated January 27, 2011. The results for the first quarter exceeded expectations due to higher overall revenue primarily related to domestic pawn lending activities and growth in the international operations of the Company’s E Commerce segment. The net earnings for the first quarter of 2011 include unusual expense items of approximately $2.7 million (5 cents per share after taxes) related to its foreign pawn lending business.
Consolidated total revenue increased 13% to $355.2 million for the three-month period ended March 31, 2011 compared to $313.1 million in the same period in 2010. Contributing to the growth in consolidated total revenue for the first quarter of 2011 was a 13% increase in proceeds from the disposition of merchandise in the quarter, and a 15% increase in pawn loan fees and service charges both related to the Company’s dominant business of U.S. pawn related activities. The Company’s E Commerce segment generated a 20% increase in revenue due solely to the growth in its foreign lending activities as the domestic E Commerce business total revenue eased lower, as expected, due to the absence of certain U.S. markets and products that contributed revenue in 2010.
Commenting on the first quarter results, Daniel R. Feehan, President and Chief Executive Officer of Cash America, said, “Both segments of our business, Retail Services and E Commerce, experienced stronger loan demand than we expected in the quarter which has allowed us to report earnings in excess of our guidance and consensus estimates. We believe a portion of the increased demand may be attributable to timing issues associated with the tax refund season, but overall demand appears more buoyant than we anticipated. Geographically, our U.S. pawn business and foreign E Commerce business were both major contributors to the year-over-year earnings increase. Our foreign pawn lending business recorded a sizable loss in the quarter, including significant charges incurred related to our previously discussed strategy of transitioning to a full-format model. Although the numbers for our foreign pawn operation do not yet reflect our progress, we are making serious strides in establishing the foundation necessary for future asset and earnings growth.”
Cash America will host a conference call to discuss the first quarter results on Thursday, April 21 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 (www.cashamerica.com). To listen to the live call, please go to the web site at least fifteen minutes prior to the call to register, download, and install any necessary audio software.
Additionally, the Company announced that the Board of Directors, at its regularly scheduled quarterly meeting, declared a $0.035 (3.5 cents) per share cash dividend on common shares outstanding. The dividend will be paid at the close of business on May 18, 2011 to shareholders of record on May 4, 2011.
Outlook for the Second Quarter of 2011 and the 2011 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 consumer loans. During the first quarter of 2011, the typical seasonal decline in loan balances occurred due to Federal Income Tax refunds received by many of our customers. Typically, customers use a portion of these refunds to pay back existing loans and for the purchase of merchandise. During the second quarter, loan balances typically recover due to seasonal factors, and the rate of this increase has a significant influence on second quarter results. Other elements expected to affect the growth in revenue include the potential impact of the regulatory governance of loan products, the growth and development of the Mexican pawn operations and the development and expansion of the Company’s online based distribution channel for its consumer loan products. While the Company intends to maintain its current underwriting standards, higher loan demand for the consumer loan products could lead to higher loan losses associated with the difficult consumer economic environment. Based on its views and on the preceding factors, management expects that the second quarter 2011 earnings per share will be between 75 and 80 cents per share compared to 66 cents per share in the second quarter 2010. At this time, management updates and raises its previously reported expectations for its fiscal year 2011 earnings per share to a range of between $4.16 and $4.30 which compares to actual full year 2010 earnings per share of $3.67.
About the Company
As of March 31, 2011, Cash America International, Inc. had 1,087 total locations offering specialty financial services to consumers, which include 781 lending locations (including nine unconsolidated franchised locations) operating in 23 states in the United States under the names “Cash America Pawn,” “SuperPawn,” “Maxit,” “Pawn X-Change,” “Cash America Payday Advance,” and “Cashland,” and 182 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.” The Company also operated 118 unconsolidated franchised and six Company-owned check cashing centers operating in 18 states in the United States under the name “Mr. Payroll” as of March 31, 2011. Additionally, as of March 31, 2011, the Company offered consumer loans over the Internet to customers in 30 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.
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.goldpromise.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 loan, tax and other domestic and foreign laws and governmental rules and regulations applicable to the Company's business, changes in demand for the Company's services, acceptance by consumers, legislators or regulators of the negative characterization by the media and consumer activists with respect to certain of the Company’s loan products, the continued acceptance of the online distribution channel by the Company’s online loan customers, the actions of third parties who provide, acquire or offer products and services to, from 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, changes in economic conditions, real estate market fluctuations, interest rate fluctuations, changes in foreign currency exchange rates, changes in the capital markets, changes in the Company’s ability to satisfy its debt obligations or to refinance existing debt obligations or obtain new capital to finance growth, 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, a prolonged interruption in the Company’s operations of its facilities, systems and business functions, including its information technology and other business systems, the effect of any current or future litigation proceedings on the Company, the implementation of new, or changes in the interpretation of existing, accounting principles or financial reporting requirements, acts of God, war or terrorism, pandemics and other events, the effect of any of such changes on the Company’s business or the markets in which it 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) | |||||||||
| (Unaudited) | |||||||||
| Three Months Ended | |||||||||
| March 31, | |||||||||
| 2011 | 2010 | ||||||||
| Consolidated Operations: | |||||||||
| Total revenue | $ | 355,205 | $ | 313,062 | |||||
| Net revenue | 216,128 | 189,224 | |||||||
| Total operating expenses | 152,900 | 132,785 | |||||||
| Income from operations | $ | 63,228 | $ | 56,439 | |||||
| Income before income taxes | 57,539 | 50,853 | |||||||
| Net Income | $ | 35,787 | $ | 32,051 | |||||
| Net loss (income) attributable to the noncontrolling interest | 591 | (18 | ) | ||||||
| Net Income Attributable to Cash America International, Inc. | $ | 36,378 | $ | 32,033 | |||||
| Earnings per share: | |||||||||
| Net Income attributable to Cash America International, Inc. common shareholders: | |||||||||
| Basic | $ | 1.22 | $ | 1.08 | |||||
| Diluted | $ | 1.13 | $ | 1.01 | |||||
| Weighted average shares: | |||||||||
| Basic | 29,755 | 29,687 | |||||||
| Diluted | 32,060 | 31,735 | |||||||
| CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS | |||||||||||||||
(in thousands, except per share data) | |||||||||||||||
| (Unaudited) | |||||||||||||||
| March 31, | December 31, | ||||||||||||||
| 2011 | 2010 | 2010 | |||||||||||||
| Assets | |||||||||||||||
| Current assets: | |||||||||||||||
| Cash and cash equivalents | $ | 42,414 | $ | 40,286 | $ | 38,324 | |||||||||
| Pawn loans | 188,088 | 158,347 | 218,408 | ||||||||||||
| Consumer loans, net | 126,135 | 99,021 | 139,377 | ||||||||||||
| Merchandise held for disposition, net | 110,490 | 97,870 | 124,399 | ||||||||||||
| Pawn loan fees and service charges receivable | 35,530 | 30,597 | 41,216 | ||||||||||||
| Prepaid expenses and other assets | 37,709 | 39,592 | 32,490 | ||||||||||||
| Deferred tax assets | 26,606 | 20,386 | 28,016 | ||||||||||||
| Total current assets | 566,972 | 486,099 | 622,230 | ||||||||||||
| Property and equipment, net | 220,817 | 192,592 | 222,320 | ||||||||||||
| Goodwill | 545,665 | 509,004 | 543,324 | ||||||||||||
| Intangible assets, net | 29,584 | 27,187 | 31,188 | ||||||||||||
| Other assets | 14,738 | 7,442 | 8,124 | ||||||||||||
| Total assets | $ | 1,377,776 | $ | 1,222,324 | $ | 1,427,186 | |||||||||
| Liabilities and Equity | |||||||||||||||
| Current liabilities: | |||||||||||||||
| Accounts payable and accrued expenses | $ | 82,213 | $ | 71,408 | $ | 96,465 | |||||||||
| Accrued supplemental acquisition payment | - | 11,365 | - | ||||||||||||
| Customer deposits | 10,434 | 9,731 | 9,146 | ||||||||||||
| Income taxes currently payable | 12,823 | 14,673 | 888 | ||||||||||||
| Current portion of long-term debt | 17,689 |
| 25,493 | 24,433 | |||||||||||
| Total current liabilities | 123,159 | 132,670 | 130,932 | ||||||||||||
| Deferred tax liabilities | 64,435 | 44,877 | 56,792 | ||||||||||||
| Noncurrent income tax payable | 2,568 | 2,191 | 2,408 | ||||||||||||
| Other liabilities | 1,935 | 7,148 | 2,052 | ||||||||||||
| Long-term debt | 352,883 | 313,794 | 432,271 | ||||||||||||
| Total liabilities | $ | 544,980 | $ | 500,680 | $ | 624,455 | |||||||||
| Equity: | |||||||||||||||
| Cash America International, Inc. equity: | |||||||||||||||
Common stock, $0.10 par value per share, 80,000,000 shares authorized, 30,235,164 shares issued | 3,024 | 3,024 | 3,024 | ||||||||||||
| Additional paid-in capital | 164,516 | 163,796 | 165,658 | ||||||||||||
| Retained earnings | 679,546 | 563,803 | 644,208 | ||||||||||||
| Accumulated other comprehensive income | 9,677 | 5,807 | 4,797 | ||||||||||||
Treasury shares, at cost (869,699 shares, 725,531 shares and 685,315 shares at March 31, 2011 and 2010, and at December 31, 2010, respectively) | (29,935 | ) | (21,429 | ) | (21,283 | ) | |||||||||
| Total Cash America International, Inc. shareholders' equity | 826,828 | 715,001 | 796,404 | ||||||||||||
| Noncontrolling interest | 5,968 | 6,643 | 6,327 | ||||||||||||
| Total equity | 832,796 | 721,644 | 802,731 | ||||||||||||
| Total liabilities and equity | $ | 1,377,776 | $ | 1,222,324 | $ | 1,427,186 | |||||||||
| CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES | |||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | |||||||||||
(in thousands, except per share data) | |||||||||||
(Unaudited) | |||||||||||
| Three Months Ended | |||||||||||
| March 31, | |||||||||||
| 2011 | 2010 | ||||||||||
| Revenue | |||||||||||
| Pawn loan fees and service charges | $ | 66,889 | $ | 58,281 | |||||||
| Proceeds from disposition of merchandise | 160,661 | 141,883 | |||||||||
| Consumer loan fees | 123,127 | 108,442 | |||||||||
| Other | 4,528 | 4,456 | |||||||||
| Total Revenue | 355,205 | 313,062 | |||||||||
| Cost of Revenue | |||||||||||
| Disposed merchandise | 99,577 | 89,945 | |||||||||
| Consumer loan loss provision | 39,500 | 33,893 | |||||||||
| Total Cost of Revenue | 139,077 | 123,838 | |||||||||
| Net Revenue | 216,128 | 189,224 | |||||||||
| Expenses | |||||||||||
| Operations | 113,401 | 96,378 | |||||||||
| Administration | 27,057 | 25,689 | |||||||||
| Depreciation and amortization | 12,442 | 10,718 | |||||||||
| Total Expenses | 152,900 | 132,785 | |||||||||
| Income from Operations | 63,228 | 56,439 | |||||||||
| Interest expense | (5,611 | ) | (5,457 | ) | |||||||
| Interest income | 22 | 8 | |||||||||
| Foreign currency transaction loss | (96 | ) | (137 | ) | |||||||
| Equity in loss of unconsolidated subsidiary | (4 | ) | - | ||||||||
| Income before Income Taxes | 57,539 | 50,853 | |||||||||
| Provision for income taxes | 21,752 | 18,802 | |||||||||
| Net Income | 35,787 | 32,051 | |||||||||
| Net loss (income) attributable to the noncontrolling interest | 591 | (18 | ) | ||||||||
| Net Income Attributable to Cash America International, Inc. | $ | 36,378 | $ | 32,033 | |||||||
| Earnings Per Share: | |||||||||||
Net Income attributable to Cash America International, Inc. common shareholders: | |||||||||||
| Basic | $ | 1.22 | $ | 1.08 | |||||||
| Diluted | $ | 1.13 | $ | 1.01 | |||||||
| Weighted average common shares outstanding: | |||||||||||
| Basic | 29,755 | 29,687 | |||||||||
| Diluted | 32,060 | 31,735 | |||||||||
| Dividends declared per common share | $ | 0.035 | $ | 0.035 | |||||||
| 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 months ended March 31, 2011 and 2010. | ||||||||||||||||||||||||||||||||||||
| 2011 | 2010 | |||||||||||||||||||||||||||||||||||
| Domestic | Foreign | Total | Domestic | Foreign | Total | |||||||||||||||||||||||||||||||
As of March 31, | ||||||||||||||||||||||||||||||||||||
| Ending pawn loan balances | $ | 166,074 | $ | 22,014 | $ | 188,088 | $ | 135,520 | $ | 22,827 | $ | 158,347 | ||||||||||||||||||||||||
| Ending merchandise balance, net | $ | 110,490 | $ | - | (a) | $ | 110,490 | $ | 97,870 | $ | - | (a) | $ | 97,870 | ||||||||||||||||||||||
Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||
| Pawn loan fees and service charges | $ | 60,226 | $ | 6,663 | $ | 66,889 | $ | 50,862 | $ | 7,419 | $ | 58,281 | ||||||||||||||||||||||||
| Average pawn loan balance outstanding | $ | 180,885 | $ | 21,437 | $ | 202,322 | $ | 148,063 | $ | 22,871 | $ | 170,934 | ||||||||||||||||||||||||
| Amount of pawn loans written and renewed | $ | 179,539 | $ | 20,886 | $ | 200,425 | $ | 142,036 | $ | 21,030 | $ | 163,066 | ||||||||||||||||||||||||
| Annualized yield on pawn loans | 135.0 | % | 126.1 | % | 134.1 | % | 139.3 | % | 131.5 | % | 138.3 | % | ||||||||||||||||||||||||
| Gross profit margin on disposition of merchandise | 38.0 | % | - | (a) | 38.0 | % | 36.6 | % | - | (a) | 36.6 | % | ||||||||||||||||||||||||
| Merchandise turnover | 3.4 | - | (a) | 3.4 | 3.4 | - | (a) | 3.4 | ||||||||||||||||||||||||||||
| (a) With respect to the Company’s foreign pawn operations, collateral underlying unredeemed pawn loans is not owned by the Company; therefore, proceeds from disposition are recorded as pawn loan fees and service charges in the Company’s consolidated statements of operations. | ||||||||||||||||||||||||||||||||||||
| 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 jewelry and general merchandise direct to consumers through any of the Company’s retail services locations or the internet. 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 months ended March 31, 2011 and 2010. | ||||||||||||||||||||||||||||||
| Three Months Ended March 31, | ||||||||||||||||||||||||||||||
| 2011 | 2010 | |||||||||||||||||||||||||||||
| Retail | Commercial | Total | Retail | Commercial | Total | |||||||||||||||||||||||||
| Proceeds from disposition | $ | 95,383 | $ | 65,278 | $ | 160,661 | $ | 86,143 | $ | 55,740 | $ | 141,883 | ||||||||||||||||||
| Gross profit on disposition | $ | 37,839 | $ | 23,245 | $ | 61,084 | $ | 33,490 | $ | 18,448 | $ | 51,938 | ||||||||||||||||||
| Gross profit margin | 39.7 | % | 35.6 | % | 38.0 | % | 38.9 | % | 33.1 | % | 36.6 | % | ||||||||||||||||||
| Percentage of total gross profit | 61.9 | % | 38.1 | % | 100.0 | % | 64.5 | % | 35.5 | % | 100.0 | % | ||||||||||||||||||
The table below summarizes the age of merchandise held for disposition before valuation allowance of $0.7 million at March 31, 2011 and 2010 (dollars in thousands). | ||||||||||||||
| 2011 | 2010 | |||||||||||||
| Balance at March 31, | Amount | % | Amount | % | ||||||||||
| Jewelry - held for one year or less | $ | 72,905 | 65.5 | $ | 64,268 | 65.2 | ||||||||
| Other merchandise - held for one year or less | 33,323 | 30.0 | 26,933 | 27.3 | ||||||||||
| Total merchandise held for one year or less | 106,228 | 95.5 | 91,201 | 92.5 | ||||||||||
| Jewelry - held for more than one year | 2,232 | 2.0 | 4,449 | 4.5 | ||||||||||
| Other merchandise - held for more than one year | 2,730 | 2.5 | 2,920 | 3.0 | ||||||||||
| Total merchandise held for more than one year | 4,962 | 4.5 | 7,369 | 7.5 | ||||||||||
| Total merchandise held for disposition | $ | 111,190 | 100.0 | $ | 98,570 | 100.0 | ||||||||
| CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||
| CONSUMER LOAN FINANCIAL AND OPERATING DATA | |||||||||||||||||||||||||||||||
(in thousands, except where otherwise noted) | |||||||||||||||||||||||||||||||
The following table sets forth consumer loan fees by channel and segment, adjusted for the deduction of the loan loss provision for the three months ended March 31, 2011 and 2010 (dollars in thousands): | |||||||||||||||||||||||||||||||
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||
| 2011 | 2010 | ||||||||||||||||||||||||||||||
Retail Services Segment | E-Commerce Segment | Total Company | Retail Services Segment | E-Commerce Segment | Total Company | ||||||||||||||||||||||||||
| Consumer loan fees | $ | 25,835 | $ | 97,292 | $ | 123,127 | $ | 27,544 | $ | 80,898 | $ | 108,442 | |||||||||||||||||||
| Consumer loan loss provision | 3,183 | 36,317 | 39,500 | 2,986 | 30,907 | 33,893 | |||||||||||||||||||||||||
| Consumer loan fees, net of loan loss provision | $ | 22,652 | $ | 60,975 | $ | 83,627 | $ | 24,558 | $ | 49,991 | $ | 74,549 | |||||||||||||||||||
| Year over year change - $ | $ | (1,906 | ) | $ | 10,984 | $ | 9,078 | $ | 1,730 | $ | 17,285 | $ | 19,015 | ||||||||||||||||||
| Year over year change - % | (7.8 | ) | % | 22.0 | % | 12.2 | % | 7.6 | % | 52.8 | % | 34.2 | % | ||||||||||||||||||
Consumer loan loss provision as % of consumer loan fees | 12.3 | % | 37.3 | % | 32.1 | % | 10.8 | % | 38.2 | % | 31.3 | % | |||||||||||||||||||
In addition to reporting financial results in accordance with generally accepted accounting principles (“GAAP”) in the United States, the Company has provided combined consumer loans and combined consumer loans written, which are non-GAAP measures. Combined consumer loans and combined consumer loans written include (i) consumer loans written by the Company, which are GAAP measures, (ii) consumer loans written by third-party lenders through the CSO program, which are non-GAAP measures and (iii) the Company's participation interests in consumer loans written by a third-party lender’s micro line of credit (“MLOC”) product, which are GAAP measures.
Management believes these measures are useful in evaluating the consumer loan portfolio on an aggregate basis, including its evaluation of the loss provision for the Company-owned portfolio and third-party lender-owned portfolios that the Company guarantees. The following table summarizes selected data related to the Company’s consumer loan activities as of March 31, 2011 and 2010 and for the three months ended March 31, 2011 and 2010.
| As of March 31, | ||||||||||||||||||||||||||||||
| 2011 | 2010 | |||||||||||||||||||||||||||||
Company Owned(a) | Guaranteed by the Company(a) | Combined(b) | Company Owned(a) | Guaranteed by the Company(a) | Combined(b) | |||||||||||||||||||||||||
| Ending consumer loan balances: | ||||||||||||||||||||||||||||||
| Retail Services | $ | 42,480 | $ | 6,974 | $ | 49,454 | $ | 38,670 | $ | 8,451 | $ | 47,121 | ||||||||||||||||||
| Online Lending | 118,665 | 28,272 | 146,937 | 71,142 | 32,548 | 103,690 | ||||||||||||||||||||||||
| MLOC | - | - | - | 15,032 | - | 15,032 | ||||||||||||||||||||||||
| Total ending loan balance, gross | $ | 161,145 | $ | 35,246 | $ | 196,391 | $ | 124,844 | $ | 40,999 | $ | 165,843 | ||||||||||||||||||
| Less: Allowance and accrual for losses | (35,010 | ) | (1,711 | ) | (36,721 | ) | (25,823 | ) | (2,293 | ) | (28,116 | ) | ||||||||||||||||||
| Total ending loan balance, net | $ | 126,135 | $ | 33,535 | $ | 159,670 | $ | 99,021 | $ | 38,706 | $ | 137,727 | ||||||||||||||||||
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||
CONSUMER LOAN FINANCIAL AND OPERATING DATA | ||||||||||||||||||||||||
(in thousands, except where otherwise noted) | ||||||||||||||||||||||||
| Three Months Ended March 31, | ||||||||||||||||||||||||
| 2011 | 2010 | |||||||||||||||||||||||
Company Owned(a) | Guaranteed by the Company(a) | Total(b) | Company Owned(a) | Guaranteed by the Company(a) | Total(b) | |||||||||||||||||||
| Amount of consumer loans written: | ||||||||||||||||||||||||
| Retail Services | $ | 161,055 | $ | 41,232 | $ | 202,287 | $ | 160,456 | $ | 48,070 | $ | 208,526 | ||||||||||||
| Online Lending | 268,755 | 166,230 | 434,985 | 184,654 | 177,481 | 362,135 | ||||||||||||||||||
| MLOC | - | - | - | 74,589 | - | 74,589 | ||||||||||||||||||
| Total consumer loans written | $ | 429,810 | $ | 207,462 | $ | 637,272 | $ | 419,699 | $ | 225,551 | $ | 645,250 | ||||||||||||
| Average amount per consumer loan: | ||||||||||||||||||||||||
| Retail Services | $ | 456 | $ | 581 | $ | 477 | $ | 440 | $ | 579 | $ | 465 | ||||||||||||
| Online Lending | 437 | 713 | 513 | 412 | 705 | 517 | ||||||||||||||||||
| MLOC | - | - | - | 195 | - | 195 | ||||||||||||||||||
| Combined | $ | 444 | $ | 682 | $ | 501 | $ | 351 | $ | 674 | $ | 421 | ||||||||||||
(a) GAAP measure. | ||||||||||||||||||||||||
(b) Non-GAAP measure. | ||||||||||||||||||||||||
| Three Months Ended | |||||||||||||
| March 31, | |||||||||||||
| 2011 | 2010 | ||||||||||||
| Allowance for losses for Company-owned consumer loans: | |||||||||||||
| Balance at beginning of period | $ | 38,953 | $ | 27,350 | |||||||||
| Consumer loan loss provision | 40,627 | 34,544 | |||||||||||
| Charge-offs | (52,676 | ) | (44,242 | ) | |||||||||
| Recoveries | 8,106 | 8,171 | |||||||||||
| Balance at end of period | $ | 35,010 | $ | 25,823 | |||||||||
| Accrual for third-party lender-owned consumer loans: | |||||||||||||
| Balance at beginning of period | $ | 2,838 | $ | 2,944 | |||||||||
| Consumer loan loss provision | (1,127 | ) | (651 | ) | |||||||||
| Balance at end of period | $ | 1,711 | $ | 2,293 | |||||||||
Combined consumer loan loss provision as a % of combined consumer loans written (a) | 6.2 | % | 5.3 | % | |||||||||
Charge-offs (net of recoveries) as a % of combined consumer loans written (a) | 7.0 | % | 5.6 | % | |||||||||
Combined consumer loan loss provision as a % of consumer loan fees (a) | 32.1 | % | 31.3 | % | |||||||||
(a) Non-GAAP measure. | |||||||||||||
| CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||
| INCOME FROM OPERATIONS BY OPERATING SEGMENT | |||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||
The Company allocates corporate administrative expenses to each operating segment based on personnel expenses at each segment. In the e-commerce segment, certain administrative expenses are allocated between the domestic and foreign components based on the amount of loans written for each geographic location. For comparison purposes, all prior periods in the tables below reflect the current classification of administrative and operating expenses. | |||||||||||||||||||||||||||||
| Retail Services | E-Commerce | ||||||||||||||||||||||||||||
| Domestic | Foreign | Total | Domestic | Foreign | Total | Consolidated | |||||||||||||||||||||||
Three Months Ended March 31, 2011 | |||||||||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||||||||
| Pawn loan fees and service charges | $ | 60,226 | $ | 6,663 | $ | 66,889 | $ | - | $ | - | $ | - | $ | 66,889 | |||||||||||||||
| Proceeds from disposition of merchandise | 160,661 | - | 160,661 | - | - | - | 160,661 | ||||||||||||||||||||||
| Consumer loan fees | 25,835 | - | 25,835 | 58,711 | 38,581 | 97,292 | 123,127 | ||||||||||||||||||||||
| Other | 3,885 | 102 | 3,987 | 233 | 308 | 541 | 4,528 | ||||||||||||||||||||||
| Total revenue | 250,607 | 6,765 | 257,372 | 58,944 | 38,889 | 97,833 | 355,205 | ||||||||||||||||||||||
| Disposed merchandise | 99,577 | - | 99,577 | - | - | - | 99,577 | ||||||||||||||||||||||
| Consumer loan loss provision | 3,183 | - | 3,183 | 17,158 | 19,159 | 36,317 | 39,500 | ||||||||||||||||||||||
| Total cost of revenue | 102,760 | - | 102,760 | 17,158 | 19,159 | 36,317 | 139,077 | ||||||||||||||||||||||
| Net revenue | 147,847 | 6,765 | 154,612 | 41,786 | 19,730 | 61,516 | 216,128 | ||||||||||||||||||||||
| Expenses | |||||||||||||||||||||||||||||
| Operations | 81,731 | 6,785 | 88,516 | 13,848 | 11,037 | 24,885 | 113,401 | ||||||||||||||||||||||
| Administration | 11,201 | 2,476 | 13,677 | 8,313 | 5,067 | 13,380 | 27,057 | ||||||||||||||||||||||
| Depreciation and amortization | 7,991 | 1,511 | 9,502 | 2,748 | 192 | 2,940 | 12,442 | ||||||||||||||||||||||
| Total expenses | 100,923 | 10,772 | 111,695 | 24,909 | 16,296 | 41,205 | 152,900 | ||||||||||||||||||||||
| Income (loss) from operations | $ | 46,924 | $ | (4,007 | ) | $ | 42,917 | $ | 16,877 | $ | 3,434 | $ | 20,311 | $ | 63,228 | ||||||||||||||
As of March 31, 2011 | |||||||||||||||||||||||||||||
| Total assets | $ | 874,901 | $ | 126,750 | $ | 1,001,651 | $ | 304,071 | $ | 72,054 | $ | 376,125 | $ | 1,377,776 | |||||||||||||||
| Goodwill | $ | 335,383 | $ | 210,282 | $ | 545,665 | |||||||||||||||||||||||
| Retail Services | E-Commerce | ||||||||||||||||||||||||||||
| Domestic | Foreign | Total | Domestic | Foreign | Total | Consolidated | |||||||||||||||||||||||
Three Months Ended March 31, 2010 | |||||||||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||||||||
| Pawn loan fees and service charges | $ | 50,862 | $ | 7,419 | $ | 58,281 | $ | - | $ | - | $ | - | $ | 58,281 | |||||||||||||||
| Proceeds from disposition of merchandise | 141,883 | - | 141,883 | - | - | - | 141,883 | ||||||||||||||||||||||
| Consumer loan fees | 27,544 | - | 27,544 | 62,634 | 18,264 | 80,898 | 108,442 | ||||||||||||||||||||||
| Other | 4,107 | 33 | 4,140 | 316 | - | 316 | 4,456 | ||||||||||||||||||||||
| Total revenue | 224,396 | 7,452 | 231,848 | 62,950 | 18,264 | 81,214 | 313,062 | ||||||||||||||||||||||
| Disposed merchandise | 89,945 | - | 89,945 | - | - | - | 89,945 | ||||||||||||||||||||||
| Consumer loan loss provision | 2,986 | - | 2,986 | 23,413 | 7,494 | 30,907 | 33,893 | ||||||||||||||||||||||
| Total cost of revenue | 92,931 | - | 92,931 | 23,413 | 7,494 | 30,907 | 123,838 | ||||||||||||||||||||||
| Net revenue | 131,465 | 7,452 | 138,917 | 39,537 | 10,770 | 50,307 | 189,224 | ||||||||||||||||||||||
| Expenses | |||||||||||||||||||||||||||||
| Operations | 73,098 | 3,743 | 76,841 | 13,638 | 5,899 | 19,537 | 96,378 | ||||||||||||||||||||||
| Administration | 12,456 | 1,979 | 14,435 | 8,393 | 2,861 | 11,254 | 25,689 | ||||||||||||||||||||||
| Depreciation and amortization | 7,544 | 1,143 | 8,687 | 1,972 | 59 | 2,031 | 10,718 | ||||||||||||||||||||||
| Total expenses | 93,098 | 6,865 | 99,963 | 24,003 | 8,819 | 32,822 | 132,785 | ||||||||||||||||||||||
| Income from operations | $ | 38,367 | $ | 587 | $ | 38,954 | $ | 15,534 | $ | 1,951 | $ | 17,485 | $ | 56,439 | |||||||||||||||
As of March 31, 2010 | |||||||||||||||||||||||||||||
| Total assets | $ | 757,879 | $ | 122,077 | $ | 879,956 | $ | 305,870 | $ | 36,498 | $ | 342,368 | $ | 1,222,324 | |||||||||||||||
| Goodwill | $ | 303,966 | $ | 205,038 | $ | 509,004 | |||||||||||||||||||||||
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 March 31, 2011 and 2010. The Company’s domestic retail services locations operate under the names “Cash America Pawn,” “SuperPawn,” “Cash America Payday Advance,” “Cashland,” “Maxit,” “Pawn X-Change” and “Mr. Payroll.” (Maxit and Pawn X-Change were acquired in 2010.) The Company’s foreign retail services locations (of which the Company is a majority owner) operate under the name “Prenda Fácil.”
| As of March 31, | ||||||||||||||||||
| 2011 | 2010 | |||||||||||||||||
| Domestic(a) | Foreign(a) | Total | Domestic | Foreign | Total | |||||||||||||
| Retail services locations offering: | ||||||||||||||||||
| Both pawn and consumer lending | 569 | - | 569 | 583 | - | 583 | ||||||||||||
| Pawn lending only | 124 | 182 | 306 | 66 | 184 | 250 | ||||||||||||
| Consumer lending only | 88 | - | 88 | 91 | - | 91 | ||||||||||||
| Other (b) | 124 | - | 124 | 124 | - | 124 | ||||||||||||
| Total retail services | 905 | 182 | 1,087 | 864 | 184 | 1,048 | ||||||||||||
(a) Except as described in (b) below, includes locations that operate in 23 and 21 states in the United States and Mexico, respectively. | ||||||||||||||||||
(b) As of March 31, 2011 and 2010, includes six and five consolidated Company-owned check cashing locations, respectively, and 118 and 119 unconsolidated franchised check cashing locations, respectively. As of March 31, 2011, includes locations that operate in 18 states in the United States. | ||||||||||||||||||
E-Commerce Segment
As of March 31, 2011, the Company’s e-commerce operating segment offers consumer loans to customers over the Internet:
- in 30 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 processed MLOC advances on behalf of a third-party lender and had a participation interest in MLOC receivables during most of 2010. In the past, the MLOC services channel generated its earnings through loan processing services the Company provided for MetaBank related to the iAdvance MLOC product, as well as from fees generated from participation interests the Company acquired in the receivables originated by MetaBank in connection with the iAdvance program. The iAdvance program ended on October 13, 2010. The Company intends to continue pursuing the development of new MLOC opportunities during 2011.
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES |
NON-GAAP DISCLOSURE |
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.
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 that adjust for the impact of certain expenses that do not impact the Company’s liquidity, and, by the nature of the items, are disengaged from the fundamental direct operating elements of the underlying business activities of the Company. Management believes that the presentation of these measures provides investors with greater transparency to the Company’s financial condition and results of operations, which provides a more complete understanding of the Company’s financial performance, competitive position and prospects for the future. Management also believes that investors regularly rely on non-GAAP financial measures, such as adjusted earnings and adjusted earnings per share, to assess operating performance and that such measures may highlight trends and intricate details in the Company’s business that may not otherwise be apparent when relying on financial measures calculated in accordance with GAAP. 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 | |||||||||||||||||
| March 31, | |||||||||||||||||
| 2011 | 2010 | ||||||||||||||||
| $ | Per Share | $ | Per Share | ||||||||||||||
Net income attributable to Cash America International, Inc. | $ | 36,378 | $ | 1.13 | $ | 32,033 | $ | 1.01 | |||||||||
| Adjustments: | |||||||||||||||||
| Intangible asset amortization, net of tax | 1,104 | 0.04 | 752 | 0.02 | |||||||||||||
| Non-cash equity-based compensation, net of tax | 769 | 0.02 | 574 | 0.02 | |||||||||||||
Convertible debt non-cash interest and issuance cost amortization, net of tax | 541 | 0.02 | 513 | 0.02 | |||||||||||||
| Foreign exchange loss, net of tax | 60 | - | 86 | - | |||||||||||||
| Adjusted earnings | $ | 38,852 | $ | 1.21 | $ | 33,958 | $ | 1.07 | |||||||||
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES |
ADJUSTED EBITDA |
Adjusted EBITDA
The table below shows adjusted EBITDA, a non-GAAP measure that is defined as earnings before depreciation, amortization, interest, foreign currency transaction gains or losses, equity in earnings or loss of unconsolidated subsidiary, taxes and net income or loss attributable to the noncontrolling interest. Management believes adjusted EBITDA is used by investors to analyze operating performance and evaluate the Company’s ability to incur and service debt and its capacity for making capital expenditures. In addition, adjusted EBITDA is also useful to investors to help assess the Company’s liquidity and estimated enterprise value. The computation of adjusted EBITDA as presented below may differ from the computation of similarly-titled measures provided by other companies (dollars in thousands):
Trailing 12 Months Ended March 31, | ||||||||
| 2011 | 2010 | |||||||
Net Income attributable to Cash America International Inc. | $ | 119,880 | $ | 104,801 | ||||
| Adjustments: | ||||||||
| Depreciation and amortization expenses | 45,651 | 41,966 | ||||||
| Interest expense, net | 22,157 | 21,173 | ||||||
| Foreign currency transaction loss | 422 | 159 | ||||||
| Equity in loss of unconsolidated subsidiary | 140 | - | ||||||
| Provision for income taxes | 72,219 | 61,519 | ||||||
| Net (income) loss attributable to the noncontrolling interest | (903) | 961 | ||||||
| Adjusted EBITDA | $ | 259,566 | $ | 230,579 | ||||
| Adjusted EBITDA margin calculated as follows: | ||||||||
| Total revenue | $ | 1,335,477 | $ | 1,165,264 | ||||
| Adjusted EBITDA | 259,566 | 230,579 | ||||||
| Adjusted EBITDA as a percentage of total revenue | 19.4% | 19.8% | ||||||
CONTACT:
Cash America International, Inc.
Thomas A. Bessant, Jr., 817-335-1100