Exhibit 99.1
Cash America Raises Fiscal 2011 Earnings Guidance, Reports Second Quarter Net Income Increase of 29% and Declares Dividend
FORT WORTH, Texas--(BUSINESS WIRE)--July 21, 2011--Cash America International, Inc. (NYSE: CSH) reported today that its net income for the second quarter ended June 30, 2011 was up 29% to $26,981,000 (84 cents per share), which compares to the second quarter 2010 net income of $20,889,000 (66 cents per share). Earnings per share for the second quarter of 2011 exceeded the high end of management’s publicly released earnings per share guidance of 80 cents, as reported in the Company’s press release dated April 21, 2011. Earnings levels exceeded the top end of estimates due to higher growth in revenue from both U.S. pawn lending activities and the Company’s E-Commerce business outside the U.S., which combined with lower losses on consumer loans to increase earnings above expectations for the second quarter.
Total revenue during the second quarter of 2011 was $334.3 million, up 14% from $292.1 million in the second quarter of 2010. Contributing to the increase in total revenue was a 15% increase in pawn loan fees and service charges and a 14% increase in merchandise sales during the second quarter of 2011 as compared to the same period in 2010. The increase in merchandise sales was achieved with higher gross profit margins, leading to a 18% increase in profit from the disposition of merchandise, which contributed to the stronger than expected earnings.
Revenue from consumer loan fees was $132.4 million in the second quarter of 2011, up 14% when compared to the same period in 2010. Net revenue from the Company’s consumer loan portfolio, which is total revenue reduced by the loan loss provision, increased 23%, to $87.3 million in the second quarter of 2011 compared to $70.9 million during the prior year. This increase combined with the increase in gross profit on the disposition of merchandise and increased revenue from pawn loans combined to increase consolidated net revenue 19%, to $209.8 million, which generated a 27% increase in income from operations in the second quarter of 2011 compared to the same period in 2010.
Commenting on the results of the quarter, Daniel R. Feehan, President and Chief Executive Officer of Cash America said, “We experienced strong growth in both our secured and unsecured loan products this quarter as certain macro-economic factors continue to drive consumer demand for short-term credit. This growth combined with lower loss rates and higher retail margins provided a real boost to revenues and earnings. Additionally, we remain encouraged with the progress we are making in diversifying both the geography and product mix of our business.”
For the first six months of fiscal year 2011, total revenue increased 14% to $689.5 million compared to $605.1 million for the same period in 2010. Income from operations through the first six months of fiscal 2011 increased 18% to $113.1 million, and the Company posted a 20% increase in net income to $63,359,000 ($1.99 per share) for the first six months of fiscal year 2011 compared to $52,922,000 ($1.67 per share) for the same period in 2010.
Cash America will host a conference call to discuss the second quarter results on Thursday, July 21, at 7:00 AM CDT. A live webcast of the call will be available on the Investor Relations section of the Company’s corporate website (http://www.cashamerica.com). To listen to the live call, please go to the website at least fifteen minutes early to register, download, and install any necessary audio software. A replay will be available on the Company’s website 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 17, 2011 to shareholders of record on August 3, 2011.
Outlook for the Third Quarter of 2011 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 that could affect the Company’s growth in revenue include the regulatory governance of consumer loan products, the development and growth of new markets for the Company’s E-Commerce distribution platform for consumer lending products, and the continued growth and development of the Company’s pawn operations in Mexico. As the Company enters the third quarter of 2011, management anticipates that demand for the Company’s lending products will continue to be similar to the demand experienced in the second quarter of 2011. Based on its views and on the preceding factors management expects the third quarter 2011 net income per share to be between $1.05 and $1.10 per share compared to 90 cents per share in the third quarter of 2010. In addition, because of the success in the current quarter and the higher than originally expected balances of lending assets, management increases its previously reported expectations for its fiscal year 2011 to a range of between $4.28 and $4.48 per share, compared to $3.67 per share in fiscal 2010.
About the Company
As of June 30, 2011, Cash America International, Inc. had 1,084 total locations offering specialty financial services to consumers, which include 782 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 184 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 112 unconsolidated franchised and six Company-owned check cashing centers operating in 18 states in the United States under the name “Mr. Payroll” as of June 30, 2011. Additionally, as of June 30, 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 and http://www.poundstopocket.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.dollarsdirect.com.au | |
http://www.enovafinancial.com | http://www.dollarsdirect.ca | |
http://www.cashnetusa.com | http://www.goldpromise.com | |
http://www.cashlandloans.com | http://www.mrpayroll.com | |
http://www.quickquid.co.uk | http://www.primaryinnovations.net | |
http://www.poundstopocket.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 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 | Six Months Ended | ||||||||||||||
| June 30, | June 30, | ||||||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||||
| Consolidated Operations: | |||||||||||||||
| Total revenue | $ | 334,252 | $ | 292,081 | $ | 689,457 | $ | 605,143 | |||||||
| Net revenue | 209,848 | 176,730 | 425,976 | 365,954 | |||||||||||
| Total operating expenses | 160,024 | 137,592 | 312,924 | 270,377 | |||||||||||
| Income from operations | $ | 49,824 | $ | 39,138 | $ | 113,052 | $ | 95,577 | |||||||
| Income before income taxes | 43,796 | 33,846 | 101,335 | 84,699 | |||||||||||
| Net Income | $ | 27,245 | $ | 20,911 | $ | 63,032 | $ | 52,962 | |||||||
| Net loss (income) attributable to the noncontrolling interest | (264 | ) | (22 | ) | $ | 327 | $ | (40 | ) | ||||||
| Net Income Attributable to Cash America International, Inc. | $ | 26,981 | $ | 20,889 | $ | 63,359 | $ | 52,922 | |||||||
| Earnings per share: | |||||||||||||||
| Net Income attributable to Cash America International, Inc. common shareholders: | |||||||||||||||
| Basic | $ | 0.91 | $ | 0.70 | $ | 2.14 | $ | 1.78 | |||||||
| Diluted | $ | 0.84 | $ | 0.66 | $ | 1.99 | $ | 1.67 | |||||||
| Weighted average shares: | |||||||||||||||
| Basic | 29,593 | 29,655 | 29,673 | 29,671 | |||||||||||
| Diluted | 31,994 | 31,665 | 31,828 | 31,701 | |||||||||||
| CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS | ||||||||||||
| (in thousands, except per share data) | ||||||||||||
| (Unaudited) | ||||||||||||
| June 30, | December 31, | |||||||||||
| 2011 | 2010 | 2010 | ||||||||||
| Assets | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | $ | 48,375 | $ | 46,708 | $ | 38,324 | ||||||
| Pawn loans | 229,343 | 184,104 | 218,408 | |||||||||
| Consumer loans, net | 160,371 | 115,295 | 139,377 | |||||||||
| Merchandise held for disposition, net | 124,054 | 100,215 | 124,399 | |||||||||
| Pawn loan fees and service charges receivable | 41,757 | 35,077 | 41,216 | |||||||||
| Income taxes receivable | 3,598 | - | - | |||||||||
| Prepaid expenses and other assets | 41,973 | 50,639 | 32,490 | |||||||||
| Deferred tax assets | 32,560 | 25,035 | 28,016 | |||||||||
| Total current assets | 682,031 | 557,073 | 622,230 | |||||||||
| Property and equipment, net | 232,715 | 196,559 | 222,320 | |||||||||
| Goodwill | 546,674 | 513,758 | 543,324 | |||||||||
| Intangible assets, net | 28,638 | 25,853 | 31,188 | |||||||||
| Other assets | 14,179 | 7,244 | 8,124 | |||||||||
| Total assets | $ | 1,504,237 | $ | 1,300,487 | $ | 1,427,186 | ||||||
| Liabilities and Equity | ||||||||||||
| Current liabilities: | ||||||||||||
| Accounts payable and accrued expenses | $ | 86,565 | $ | 75,058 | $ | 96,465 | ||||||
| Accrued supplemental acquisition payment | - | 18,858 | - | |||||||||
| Customer deposits | 10,440 | 9,535 | 9,146 | |||||||||
| Income taxes currently payable | - | 9,150 | 888 | |||||||||
| Current portion of long-term debt | 19,773 | 25,493 | 24,433 | |||||||||
| Total current liabilities | 116,778 | 138,094 | 130,932 | |||||||||
| Deferred tax liabilities | 92,979 | 46,016 | 56,792 | |||||||||
| Noncurrent income tax payable | 2,638 | 2,166 | 2,408 | |||||||||
| Other liabilities | 1,711 | 7,591 | 2,052 | |||||||||
| Long-term debt | 431,734 | 374,044 | 432,271 | |||||||||
| Total liabilities | $ | 645,840 | $ | 567,911 | $ | 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 | 165,840 | 164,770 | 165,658 | |||||||||
| Retained earnings | 705,502 | 583,660 | 644,208 | |||||||||
| Accumulated other comprehensive income | 11,195 | 1,785 | 4,797 | |||||||||
Treasury shares, at cost (942,722 shares, 881,003 shares and 685,315 shares at June 30, 2011 and 2010, and at December 31, 2010, respectively) | (33,492 | ) | (27,031 | ) | (21,283 | ) | ||||||
| Total Cash America International, Inc. shareholders' equity | 852,069 | 726,208 | 796,404 | |||||||||
| Noncontrolling interest | 6,328 | 6,368 | 6,327 | |||||||||
| Total equity | 858,397 | 732,576 | 802,731 | |||||||||
| Total liabilities and equity | $ | 1,504,237 | $ | 1,300,487 | $ | 1,427,186 | ||||||
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data) (Unaudited) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Revenue | ||||||||||||||||
| Pawn loan fees and service charges | $ | 68,348 | $ | 59,507 | $ | 135,237 | $ | 117,788 | ||||||||
| Proceeds from disposition of merchandise | 130,293 | 113,850 | 290,954 | 255,733 | ||||||||||||
| Consumer loan fees | 132,414 | 115,865 | 255,541 | 224,307 | ||||||||||||
| Other | 3,197 | 2,859 | 7,725 | 7,315 | ||||||||||||
| Total Revenue | 334,252 | 292,081 | 689,457 | 605,143 | ||||||||||||
| Cost of Revenue | ||||||||||||||||
| Disposed merchandise | 79,275 | 70,417 | 178,852 | 160,362 | ||||||||||||
| Consumer loan loss provision | 45,129 | 44,934 | 84,629 | 78,827 | ||||||||||||
| Total Cost of Revenue | 124,404 | 115,351 | 263,481 | 239,189 | ||||||||||||
| Net Revenue | 209,848 | 176,730 | 425,976 | 365,954 | ||||||||||||
| Expenses | ||||||||||||||||
| Operations | 115,076 | 101,931 | 228,477 | 198,450 | ||||||||||||
| Administration | 32,640 | 25,446 | 59,697 | 50,994 | ||||||||||||
| Depreciation and amortization | 12,308 | 10,215 | 24,750 | 20,933 | ||||||||||||
| Total Expenses | 160,024 | 137,592 | 312,924 | 270,377 | ||||||||||||
| Income from Operations | 49,824 | 39,138 | 113,052 | 95,577 | ||||||||||||
| Interest expense | (5,831 | ) | (5,406 | ) | (11,442 | ) | (10,863 | ) | ||||||||
| Interest income | 20 | 151 | 42 | 159 | ||||||||||||
| Foreign currency transaction loss | (185 | ) | (37 | ) | (281 | ) | (174 | ) | ||||||||
| Equity in loss of unconsolidated subsidiary | (32 | ) | - | (36 | ) | - | ||||||||||
| Income before Income Taxes | 43,796 | 33,846 | 101,335 | 84,699 | ||||||||||||
| Provision for income taxes | 16,551 | 12,935 | 38,303 | 31,737 | ||||||||||||
| Net Income | 27,245 | 20,911 | 63,032 | 52,962 | ||||||||||||
| Net (income) loss attributable to the noncontrolling interest | (264 | ) | (22 | ) | 327 | (40 | ) | |||||||||
| Net Income Attributable to Cash America International, Inc. | $ | 26,981 | $ | 20,889 | $ | 63,359 | $ | 52,922 | ||||||||
| Earnings Per Share: | ||||||||||||||||
| Net Income attributable to Cash America International, Inc. common shareholders: | ||||||||||||||||
| Basic | $ | 0.91 | $ | 0.70 | $ | 2.14 | $ | 1.78 | ||||||||
| Diluted | $ | 0.84 | $ | 0.66 | $ | 1.99 | $ | 1.67 | ||||||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic | 29,593 | 29,655 | 29,673 | 29,671 | ||||||||||||
| Diluted | 31,994 | 31,665 | 31,828 | 31,701 | ||||||||||||
| 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, 2011 and 2010. | |||||||||||||||||||||||
| 2011 | 2010 | ||||||||||||||||||||||
| Domestic | Foreign | Total | Domestic | Foreign | Total | ||||||||||||||||||
As of June 30, | |||||||||||||||||||||||
| Ending pawn loan balances | $ | 207,330 | $ | 22,013 | $ | 229,343 | $ | 162,104 | $ | 22,000 | $ | 184,104 | |||||||||||
| Ending merchandise balance, net | $ | 124,054 | $ | - | (a) | $ | 124,054 | $ | 100,215 | $ | - | (a) | $ | 100,215 | |||||||||
Three Months Ended June 30, | |||||||||||||||||||||||
| Pawn loan fees and service charges | $ | 61,158 | $ | 7,190 | $ | 68,348 | $ | 51,080 | $ | 8,427 | $ | 59,507 | |||||||||||
| Average pawn loan balance outstanding | $ | 187,148 | $ | 23,063 | $ | 210,211 | $ | 148,998 | $ | 23,039 | $ | 172,037 | |||||||||||
| Amount of pawn loans written and renewed | $ | 221,658 | $ | 25,514 | $ | 247,172 | $ | 167,939 | $ | 24,950 | $ | 192,889 | |||||||||||
| Annualized yield on pawn loans | 131.1% | 125.0% | 130.4% | 137.5% | 146.7% | 138.7% | |||||||||||||||||
| Gross profit margin on disposition of merchandise | 39.2% | - | (a) | 39.2% | 38.1% | - | (a) | 38.1% | |||||||||||||||
| Merchandise turnover | 2.7 | - | (a) | 2.7 | 2.9 | - | (a) | 2.9 | |||||||||||||||
| 2011 | 2010 | ||||||||||||||||||||||
Six Months Ended June 30, | Domestic | Foreign | Total | Domestic | Foreign | Total | |||||||||||||||||
| Pawn loan fees and service charges | $ | 121,384 | $ | 13,853 | $ | 135,237 | $ | 101,942 | $ | 15,846 | $ | 117,788 | |||||||||||
| Average pawn loan balance outstanding | $ | 186,580 | $ | 22,284 | $ | 208,864 | $ | 150,389 | $ | 22,973 | $ | 173,362 | |||||||||||
| Amount of pawn loans written and renewed | $ | 401,197 | $ | 46,400 | $ | 447,597 | $ | 309,974 | $ | 45,979 | $ | 355,953 | |||||||||||
| Annualized yield on pawn loans | 131.2% | 125.4% | 130.6% | 136.7% | 139.1% | 137.0% | |||||||||||||||||
| Gross profit margin on disposition of merchandise | 38.5% | - | (a) | 38.5% | 37.3% | - | (a) | 37.3% | |||||||||||||||
| Merchandise turnover | 3.0 | - | (a) | 3.0 | 3.1 | - | (a) | 3.1 | |||||||||||||||
(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 and six months ended June 30, 2011 and 2010. |
| Three Months Ended June 30, | |||||||||||||||||||||||||
| 2011 | 2010 | ||||||||||||||||||||||||
| Retail | Commercial | Total | Retail | Commercial | Total | ||||||||||||||||||||
| Proceeds from disposition | $ | 74,548 | $ | 55,745 | $ | 130,293 | $ | 64,029 | $ | 49,821 | $ | 113,850 | |||||||||||||
| Gross profit on disposition | $ | 30,088 | $ | 20,930 | $ | 51,018 | $ | 26,413 | $ | 17,020 | $ | 43,433 | |||||||||||||
| Gross profit margin | 40.4 | % | 37.5 | % | 39.2 | % | 41.3 | % | 34.2 | % | 38.1 | % | |||||||||||||
| Percentage of total gross profit | 59.0 | % | 41.0 | % | 100.0 | % | 60.8 | % | 39.2 | % | 100.0 | % | |||||||||||||
| Six Months Ended June 30, | |||||||||||||||||||||||||
| 2011 | 2010 | ||||||||||||||||||||||||
| Retail | Commercial | Total | Retail | Commercial | Total | ||||||||||||||||||||
| Proceeds from disposition | $ | 169,931 | $ | 121,023 | $ | 290,954 | $ | 150,172 | $ | 105,561 | $ | 255,733 | |||||||||||||
| Gross profit on disposition | $ | 67,926 | $ | 44,176 | $ | 112,102 | $ | 59,903 | $ | 35,468 | $ | 95,371 | |||||||||||||
| Gross profit margin | 40.0 | % | 36.5 | % | 38.5 | % | 39.9 | % | 33.6 | % | 37.3 | % | |||||||||||||
| Percentage of total gross profit | 60.6 | % | 39.4 | % | 100.0 | % | 62.8 | % | 37.2 | % | 100.0 | % | |||||||||||||
The table below summarizes the age of merchandise held for disposition before valuation allowance of $0.7 million at June 30, 2011 and 2010 (dollars in thousands). | |||||||||||
| 2011 | 2010 | ||||||||||
| Balance at June 30, | Amount | % | Amount | % | |||||||
| Jewelry - held for one year or less | $ | 79,884 | 64.0 | $ | 65,112 | 64.5 | |||||
| Other merchandise - held for one year or less | 40,262 | 32.3 | 28,525 | 28.3 | |||||||
| Total merchandise held for one year or less | 120,146 | 96.3 | 93,637 | 92.8 | |||||||
| Jewelry - held for more than one year | 1,840 | 1.5 | 4,294 | 4.3 | |||||||
| Other merchandise - held for more than one year | 2,768 | 2.2 | 2,984 | 2.9 | |||||||
| Total merchandise held for more than one year | 4,608 | 3.7 | 7,278 | 7.2 | |||||||
| Total merchandise held for disposition | $ | 124,754 | 100.0 | $ | 100,915 | 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 June 30, 2011 and 2010 (dollars in thousands): | ||||||||||||||||||||||||
| Three Months Ended June 30, | ||||||||||||||||||||||||
| 2011 | 2010 | |||||||||||||||||||||||
Retail | E-Commerce | Total | Retail | E-Commerce | Total | |||||||||||||||||||
| Consumer loan fees | $ | 27,320 | $ | 105,094 | $ | 132,414 | $ | 26,782 | $ | 89,083 | $ | 115,865 | ||||||||||||
| Consumer loan loss provision | 4,756 | 40,373 | 45,129 | 5,019 | 39,915 | 44,934 | ||||||||||||||||||
| Consumer loan fees, net of loan loss provision | $ | 22,564 | $ | 64,721 | $ | 87,285 | $ | 21,763 | $ | 49,168 | $ | 70,931 | ||||||||||||
| Year over year change - $ | $ | 801 | $ | 15,553 | $ | 16,354 | $ | (1,009) | $ | 16,516 | $ | 15,507 | ||||||||||||
| Year over year change - % | 3.7 | % | 31.6 | % | 23.1 | % | (4.4) | % | 50.6 | % | 28.0 | % | ||||||||||||
Consumer loan loss provision as % of consumer loan fees | 17.4 | % | 38.4 | % | 34.1 | % | 18.7 | % | 44.8 | % | 38.8 | % | ||||||||||||
| Six Months Ended June 30, | ||||||||||||||||||||||||
| 2011 | 2010 | |||||||||||||||||||||||
Retail | E-Commerce | Total | Retail | E-Commerce | Total | |||||||||||||||||||
| Consumer loan fees | $ | 53,155 | $ | 202,386 | $ | 255,541 | $ | 54,326 | $ | 169,981 | $ | 224,307 | ||||||||||||
| Consumer loan loss provision | 7,939 | 76,690 | 84,629 | 8,005 | 70,822 | 78,827 | ||||||||||||||||||
| Consumer loan fees, net of loan loss provision | $ | 45,216 | $ | 125,696 | $ | 170,912 | $ | 46,321 | $ | 99,159 | $ | 145,480 | ||||||||||||
| Year over year change - $ | $ | (1,105) | $ | 26,537 | $ | 25,432 | $ | 721 | $ | 33,801 | $ | 34,522 | ||||||||||||
| Year over year change - % | (2.4) | % | 26.8 | % | 17.5 | % | 1.6 | % | 51.7 | % | 31.1 | % | ||||||||||||
Consumer loan loss provision as a % of consumer loan fees | 14.9 | % | 37.9 | % | 33.1 | % | 14.7 | % | 41.7 | % | 35.1 | % | ||||||||||||
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 June 30, 2011 and 2010 and for the three and six months ended June 30, 2011 and 2010.
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSUMER LOAN FINANCIAL AND OPERATING DATA (in thousands, except where otherwise noted) | |||||||||||||||||||
| As of June 30, | |||||||||||||||||||
| 2011 | 2010 | ||||||||||||||||||
Company | Guaranteed | Combined(b) | Company | Guaranteed | Combined(b) | ||||||||||||||
| Ending consumer loan balances: | |||||||||||||||||||
| Retail Services | $ | 55,480 | $ | 13,186 | $ | 68,666 | $ | 45,008 | $ | 9,536 | $ | 54,544 | |||||||
| E-Commerce | |||||||||||||||||||
| Online Lending - Domestic | 53,288 | 31,127 | 84,415 | 50,342 | 40,407 | 90,749 | |||||||||||||
| Online Lending - Foreign | 88,814 | 2,946 | 91,760 | 38,476 | 1,070 | 39,546 | |||||||||||||
| MLOC | - | - | - | 18,192 | - | 18,192 | |||||||||||||
| Total ending loan balance, gross | $ | 197,582 | $ | 47,259 | $ | 244,841 | $ | 152,018 | $ | 51,013 | $ | 203,031 | |||||||
| Less: Allowance and accrual for losses(a) | (37,211) | (2,137) | (39,348) | (36,723) | (3,325) | (40,048) | |||||||||||||
| Total ending loan balance, net | $ | 160,371 | $ | 45,122 | $ | 205,493 | $ | 115,295 | $ | 47,688 | $ | 162,983 | |||||||
(a) | GAAP measure. | ||||||||||||||||||
(b) | Except for allowance and accrual for losses, amounts represent non-GAAP measures. | ||||||||||||||||||
| Three Months Ended June 30, | ||||||||||||||||||
| 2011 | 2010 | |||||||||||||||||
Company | Guaranteed | Total(b) | Company | Guaranteed | Total(b) | |||||||||||||
| Amount of consumer loans written: | ||||||||||||||||||
| Retail Services | $ | 181,337 | $ | 45,177 | $ | 226,514 | $ | 168,919 | $ | 48,147 | $ | 217,066 | ||||||
| E-Commerce | ||||||||||||||||||
| Online Lending - Domestic | 109,209 | 155,185 | 264,394 | 117,505 | 194,757 | 312,262 | ||||||||||||
| Online Lending - Foreign | 181,863 | 14,169 | 196,032 | 91,344 | 5,482 | 96,826 | ||||||||||||
| MLOC | - | - | - | 92,309 | - | 92,309 | ||||||||||||
| Total consumer loans written | $ | 472,409 | $ | 214,531 | $ | 686,940 | $ | 470,077 | $ | 248,386 | $ | 718,463 | ||||||
| Average amount per consumer loan: | ||||||||||||||||||
| Retail Services | $ | 473 | $ | 619 | $ | 497 | $ | 434 | $ | 569 | $ | 458 | ||||||
| E-Commerce | ||||||||||||||||||
| Online Lending - Domestic | 348 | 705 | 495 | 369 | 683 | 519 | ||||||||||||
| Online Lending - Foreign | 551 | 644 | 557 | 471 | 422 | 468 | ||||||||||||
| MLOC | - | - | - | 198 | - | 198 | ||||||||||||
| Combined | $ | 460 | $ | 681 | $ | 512 | $ | 344 | $ | 650 | $ | 411 | ||||||
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSUMER LOAN FINANCIAL AND OPERATING DATA (in thousands, except where otherwise noted) | |||||||||||||||||||
| Six Months Ended June 30, | |||||||||||||||||||
| 2011 | 2010 | ||||||||||||||||||
Company | Guaranteed | Combined(b) | Company | Guaranteed | Combined(b) | ||||||||||||||
| Amount of consumer loans written: | |||||||||||||||||||
| Retail Services | $ | 342,392 | $ | 86,409 | $ | 428,801 | $ | 329,375 | $ | 96,217 | $ | 425,592 | |||||||
| E-Commerce | |||||||||||||||||||
| Online Lending - Domestic | 217,627 | 310,518 | 528,145 | 224,749 | 368,162 | 592,911 | |||||||||||||
| Online Lending - Foreign | 342,200 | 25,066 | 367,266 | 168,754 | 9,558 | 178,312 | |||||||||||||
| MLOC | - | - | - | 166,898 | - | 166,898 | |||||||||||||
| Total consumer loans written | $ | 902,219 | $ | 421,993 | $ | 1,324,212 | $ | 889,776 | $ | 473,937 | $ | 1,363,713 | |||||||
| Average amount per consumer loan: | |||||||||||||||||||
| Retail Services | $ | 465 | $ | 600 | $ | 487 | $ | 437 | $ | 574 | $ | 462 | |||||||
| E-Commerce | |||||||||||||||||||
| Online Lending - Domestic | 349 | 714 | 499 | 371 | 700 | 524 | |||||||||||||
| Online Lending - Foreign | 539 | 627 | 544 | 474 | 416 | 470 | |||||||||||||
| MLOC | - | - | - | 197 | - | 197 | |||||||||||||
| Combined | $ | 452 | $ | 681 | $ | 506 | $ | 347 | $ | 661 | $ | 416 | |||||||
(a) | GAAP measure. | ||||||||||||||||||
(b) | Non-GAAP measure. | ||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||
| June 30, | June 30, | ||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||||||
Allowance for losses for Company-owned consumer loans: | |||||||||||||||||
| Balance at beginning of period | $ | 35,010 | $ | 25,823 | $ | 38,953 | $ | 27,350 | |||||||||
| Consumer loan loss provision | 44,703 | 43,902 | 85,330 | 78,446 | |||||||||||||
| Charge-offs | (49,952 | ) | (38,591 | ) | (102,628 | ) | (82,833 | ) | |||||||||
| Recoveries | 7,450 | 5,589 | 15,556 | 13,760 | |||||||||||||
| Balance at end of period | $ | 37,211 | $ | 36,723 | $ | 37,211 | $ | 36,723 | |||||||||
Accrual for third-party lender-owned consumer loans: | |||||||||||||||||
| Balance at beginning of period | $ | 1,711 | $ | 2,293 | $ | 2,838 | $ | 2,944 | |||||||||
| Consumer loan loss provision | 426 | 1,032 | (701 | ) | 381 | ||||||||||||
| Balance at end of period | $ | 2,137 | $ | 3,325 | $ | 2,137 | $ | 3,325 | |||||||||
Combined consumer loan loss provision as a % of combined consumer loans written (a) | 6.6 | % | 6.3 | % | 6.4 | % | 5.8 | % | |||||||||
Charge-offs (net of recoveries) as a % of combined consumer loans written (a) | 6.2 | % | 4.6 | % | 6.6 | % | 5.1 | % | |||||||||
Combined consumer loan loss provision as a % of consumer loan fees (a) | 34.1 | % | 38.8 | % | 33.1 | % | 35.1 | % | |||||||||
(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 June 30, 2011 | ||||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||
| Pawn loan fees and service charges | $ | 61,158 | $ | 7,190 | $ | 68,348 | $ | - | $ | - | $ | - | $ | 68,348 | ||||||||||
| Proceeds from disposition of merchandise | 130,264 | - | 130,264 | 29 | - | 29 | 130,293 | |||||||||||||||||
| Consumer loan fees | 27,320 | - | 27,320 | 55,212 | 49,882 | 105,094 | 132,414 | |||||||||||||||||
| Other | 2,684 | 174 | 2,858 | 110 | 229 | 339 | 3,197 | |||||||||||||||||
| Total revenue | 221,426 | 7,364 | 228,790 | 55,351 | 50,111 | 105,462 | 334,252 | |||||||||||||||||
| Disposed merchandise | 79,252 | - | 79,252 | 23 | - | 23 | 79,275 | |||||||||||||||||
| Consumer loan loss provision | 4,756 | - | 4,756 | 16,504 | 23,869 | 40,373 | 45,129 | |||||||||||||||||
| Total cost of revenue | 84,008 | - | 84,008 | 16,527 | 23,869 | 40,396 | 124,404 | |||||||||||||||||
| Net revenue | 137,418 | 7,364 | 144,782 | 38,824 | 26,242 | 65,066 | 209,848 | |||||||||||||||||
| Expenses | ||||||||||||||||||||||||
| Operations | 81,013 | 5,458 | 86,471 | 13,363 | 15,242 | 28,605 | 115,076 | |||||||||||||||||
| Administration | 14,793 | 2,478 | 17,271 | 9,368 | 6,001 | 15,369 | 32,640 | |||||||||||||||||
| Depreciation and amortization | 8,066 | 1,460 | 9,526 | 2,574 | 208 | 2,782 | 12,308 | |||||||||||||||||
| Total expenses | 103,872 | 9,396 | 113,268 | 25,305 | 21,451 | 46,756 | 160,024 | |||||||||||||||||
| Income (loss) from operations | $ | 33,546 | $ | (2,032 | ) | $ | 31,514 | $ | 13,519 | $ | 4,791 | $ | 18,310 | $ | 49,824 | |||||||||
As of June 30, 2011 | ||||||||||||||||||||||||
| Total assets | $ | 971,457 | $ | 135,852 | $ | 1,107,309 | $ | 304,586 | $ | 92,342 | $ | 396,928 | $ | 1,504,237 | ||||||||||
| Goodwill | $ | 336,392 | $ | 210,282 | $ | 546,674 | ||||||||||||||||||
| Retail Services | E-Commerce | |||||||||||||||||||||||
| 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 | |||||||||||||||||
| Disposed merchandise | 70,417 | - | 70,417 | - | - | - | 70,417 | |||||||||||||||||
| Consumer loan loss provision | 5,019 | - | 5,019 | 29,466 | 10,449 | 39,915 | 44,934 | |||||||||||||||||
| Total cost of revenue | 75,436 | - | 75,436 | 29,466 | 10,449 | 39,915 | 115,351 | |||||||||||||||||
| Net revenue | 118,892 | 8,468 | 127,360 | 38,013 | 11,357 | 49,370 | 176,730 | |||||||||||||||||
| Expenses | ||||||||||||||||||||||||
| Operations | 72,955 | 4,665 | 77,620 | 16,634 | 7,677 | 24,311 | 101,931 | |||||||||||||||||
| 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 | 90,835 | 8,090 | 98,925 | 27,541 | 11,126 | 38,667 | 137,592 | |||||||||||||||||
| Income 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 | |||||||||||||||||
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES INCOME FROM OPERATIONS BY OPERATING SEGMENT (in thousands) | ||||||||||||||||||||||||
| Retail Services | E-Commerce | |||||||||||||||||||||||
| Domestic | Foreign | Total | Domestic | Foreign | Total | Consolidated | ||||||||||||||||||
Six Months Ended June 30, 2011 | ||||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||
| Pawn loan fees and service charges | $ | 121,384 | $ | 13,853 | $ | 135,237 | $ | - | $ | - | $ | - | $ | 135,237 | ||||||||||
| Proceeds from disposition of merchandise | 290,925 | - | 290,925 | 29 | - | 29 | 290,954 | |||||||||||||||||
| Consumer loan fees | 53,155 | - | 53,155 | 113,923 | 88,463 | 202,386 | 255,541 | |||||||||||||||||
| Other | 6,569 | 276 | 6,845 | 343 | 537 | 880 | 7,725 | |||||||||||||||||
| Total revenue | 472,033 | 14,129 | 486,162 | 114,295 | 89,000 | 203,295 | 689,457 | |||||||||||||||||
| Disposed merchandise | 178,829 | - | 178,829 | 23 | - | 23 | 178,852 | |||||||||||||||||
| Consumer loan loss provision | 7,939 | - | 7,939 | 33,662 | 43,028 | 76,690 | 84,629 | |||||||||||||||||
| Total cost of revenue | 186,768 | - | 186,768 | 33,685 | 43,028 | 76,713 | 263,481 | |||||||||||||||||
| Net revenue | 285,265 | 14,129 | 299,394 | 80,610 | 45,972 | 126,582 | 425,976 | |||||||||||||||||
| Expenses | ||||||||||||||||||||||||
| Operations | 162,744 | 12,243 | 174,987 | 27,211 | 26,279 | 53,490 | 228,477 | |||||||||||||||||
| Administration | 25,994 | 4,954 | 30,948 | 17,681 | 11,068 | 28,749 | 59,697 | |||||||||||||||||
| Depreciation and amortization | 16,057 | 2,971 | 19,028 | 5,322 | 400 | 5,722 | 24,750 | |||||||||||||||||
| Total expenses | 204,795 | 20,168 | 224,963 | 50,214 | 37,747 | 87,961 | 312,924 | |||||||||||||||||
| Income (loss) from operations | $ | 80,470 | $ | (6,039 | ) | $ | 74,431 | $ | 30,396 | $ | 8,225 | $ | 38,621 | $ | 113,052 | |||||||||
| Retail Services | E-Commerce | |||||||||||||||||||||||
| 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 | |||||||||||||||||
| Disposed merchandise | 160,362 | - | 160,362 | - | - | - | 160,362 | |||||||||||||||||
| Consumer loan loss provision | 8,005 | - | 8,005 | 52,879 | 17,943 | 70,822 | 78,827 | |||||||||||||||||
| Total cost of revenue | 168,367 | - | 168,367 | 52,879 | 17,943 | 70,822 | 239,189 | |||||||||||||||||
| Net revenue | 250,357 | 15,920 | 266,277 | 77,550 | 22,127 | 99,677 | 365,954 | |||||||||||||||||
| Expenses | ||||||||||||||||||||||||
| Operations | 146,053 | 8,408 | 154,461 | 30,413 | 13,576 | 43,989 | 198,450 | |||||||||||||||||
| 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 | 183,933 | 14,955 | 198,888 | 51,544 | 19,945 | 71,489 | 270,377 | |||||||||||||||||
| Income from operations | $ | 66,424 | $ | 965 | $ | 67,389 | $ | 26,006 | $ | 2,182 | $ | 28,188 | $ | 95,577 | ||||||||||
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, 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 October 2010.) The Company’s foreign retail services locations (of which the Company is a majority owner) operate under the name “Prenda Fácil.” | |||||||||||||
| As of June 30, | |||||||||||||
| 2011 | 2010 | ||||||||||||
| Domestic(a)(b) | Foreign(a) | Total | Domestic | Foreign | Total | ||||||||
| Retail services locations offering: | |||||||||||||
| Both pawn and consumer lending | 572 | - | 572 | 573 | - | 573 | |||||||
| Pawn lending only | 125 | 184 | 309 | 76 | 200 | 276 | |||||||
| Consumer lending only | 85 | - | 85 | 88 | - | 88 | |||||||
| Other (c) | 118 | - | 118 | 125 | - | 125 | |||||||
| Total retail services | 900 | 184 | 1,084 | 862 | 200 | 1,062 | |||||||
(a) | Except as described in (c) below, includes locations that operate in 23 and 21 states in the United States and Mexico, respectively. | ||||||||||||
(b) | Includes nine unconsolidated franchised locations operating under the name “Cash America Pawn” as of both June 30, 2011 and 2010. | ||||||||||||
(c) | As of June 30, 2011 and 2010, includes six and five consolidated Company-owned check cashing locations, respectively, and 112 and 120 unconsolidated franchised check cashing locations, respectively. As of June 30, 2011, includes locations that operate in 18 states in the United States. | ||||||||||||
E-Commerce Segment
As of June 30, 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 and http://www.poundstopocket.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 a third-party lender, as well as from fees generated from participation interests in receivables the Company acquired. This program ended in October 2010 because the third-party lender discontinued offering MLOC advances. The Company intends to continue pursuing the development of new MLOC opportunities during the remainder of 2011.
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NON-GAAP DISCLOSURE
Non-GAAP Disclosure
In addition to the financial information prepared in conformity with Generally Accepted Accounting Principles in the United States of America (“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 non-GAAP 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. Management believes that the presentation of these measures provides investors with greater transparency and facilitates comparison of operating results across a broad spectrum of companies with varying capital structures, compensation strategies, derivative instruments and amortization methods, 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 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 | Six Months Ended | |||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||||
| $ | Per Share | $ | Per Share | $ | Per Share | $ | Per Share | |||||||||||||||||
Net income attributable to Cash America International, Inc. | $ | 26,981 | $ | 0.84 | $ | 20,889 | $ | 0.66 | $ | 63,359 | $ | 1.99 | $ | 52,922 | $ | 1.67 | ||||||||
| Adjustments: | ||||||||||||||||||||||||
| Intangible asset amortization, net of tax | 981 | 0.03 | 664 | 0.02 | 2,085 | 0.07 | 1,417 | 0.04 | ||||||||||||||||
| Non-cash equity-based compensation, net of tax | 838 | 0.03 | 602 | 0.02 | 1,607 | 0.05 | 1,178 | 0.04 | ||||||||||||||||
Convertible debt non-cash interest and issuance cost amortization, net of tax | 550 | 0.02 | 512 | 0.02 | 1,090 | 0.03 | 1,027 | 0.04 | ||||||||||||||||
| Foreign exchange loss, net of tax | 115 | - | 23 | - | 175 | 0.01 | 109 | - | ||||||||||||||||
| Adjusted earnings | $ | 29,465 | $ | 0.92 | $ | 22,690 | $ | 0.72 | $ | 68,316 | $ | 2.15 | $ | 56,653 | $ | 1.79 | ||||||||
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 | ||||||||||
| June 30, | ||||||||||
| 2011 | 2010 | |||||||||
| Net Income attributable to Cash America International Inc. | $ | 125,972 | $ | 109,083 | ||||||
| Adjustments: | ||||||||||
| Depreciation and amortization expenses | 47,744 | 41,788 | ||||||||
| Interest expense, net | 22,713 | 21,346 | ||||||||
| Foreign currency transaction loss | 570 | 463 | ||||||||
| Equity in loss of unconsolidated subsidiary | 172 | - | ||||||||
| Provision for income taxes | 75,835 | 63,888 | ||||||||
| Net (loss) income attributable to the noncontrolling interest | (661 | ) | 771 | |||||||
| Adjusted EBITDA | $ | 272,345 | $ | 237,339 | ||||||
| Adjusted EBITDA margin calculated as follows: | ||||||||||
| Total revenue | $ | 1,377,648 | $ | 1,205,061 | ||||||
| Adjusted EBITDA | 272,345 | 237,339 | ||||||||
| Adjusted EBITDA as a percentage of total revenue | 19.8 | % | 19.7 | % | ||||||
CONTACT:
Cash America International, Inc.
Thomas A. Bessant, Jr., 817-335-1100