Exhibit 99.1
Cash America Reports Second Quarter Net Income and Declares Dividend
FORT WORTH, Texas--(BUSINESS WIRE)--July 25, 2013--Cash America International, Inc. (NYSE: CSH) reported today that its net income for the second quarter ended June 30, 2013 was $25,132,000 (81 cents per share), which compares to the second quarter 2012 net income of $29,820,000 (94 cents per share). Earnings per share for the second quarter of 2013 were in line with the Company’s pre-announced earnings issued on July 15, 2013. The reduction in earnings for the second quarter of 2013, when compared to the second quarter of 2012, is primarily attributable to a decline in gross profit on disposition proceeds primarily associated with the commercial sales of refined gold in the Company’s Domestic Retail Services Segment. The second quarter earnings fell short of the Company’s published earnings guidance primarily due to reduced customer demand for the loan products provided through the Company’s Domestic Retail Services Segment, higher expenses for health insurance and personnel costs and additional interest expense associated with the $300 million senior note offering which closed in early May.
Total revenue for the second quarter ended June 30, 2013 was $411.0 million compared to $411.6 million in the second quarter of 2012. Net revenue, which is total revenue less cost of merchandise sold and loan loss provision expense, was up 5% to $244.8 million for the three-month period ended June 30, 2013 compared to the prior year primarily due to growth in the Company’s E-Commerce Segment. The E-Commerce Segment posted higher total revenue levels and lower loan losses as a percentage of revenue leading to a 22% increase in net revenue, which reached $106.0 million for the second quarter ended June 30, 2013 compared to $86.6 million in the same quarter in 2012. The E-Commerce Segment generated income from operations of $36.4 million in the second quarter of 2013, representing an increase of 21% compared to the same period in 2012.
Commenting on the results of the quarter, Daniel R. Feehan, President and Chief Executive Officer of Cash America said, “The overall financial results for the second quarter reflect the trends that we have experienced over the past four quarters. Our Domestic Retail Services Segment has faced an industry-wide challenge of adjusting to the rapidly changing environment for the commercial sales of scrap gold and to historically tepid loan demand. At the same time, our E-Commerce Segment remains a bright spot for our enterprise with ongoing growth in its revenue and earnings associated with its diversification of loan products in both the U.S. and international markets. We expect the trends reflected in our second quarter results will continue through the balance of 2013.”
For the first six months of fiscal year 2013, total revenue increased 1% to $879.1 million compared to $869.1 million for the same period in 2012 and net revenue for the same comparison period was up 5% reaching $516.7 million in 2013 versus $490.4 million in 2012. The Company posted net income of $69,058,000 ($2.23 per share) for the first six months of fiscal year 2013 compared to $71,287,000 ($2.24 per share) for the same period in 2012.
Cash America will host a conference call to discuss the second quarter results on Thursday, July 25, 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 21, 2013 to shareholders of record on August 7, 2013.
Outlook for the Third Quarter of 2013 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 growth in revenue include the regulatory governance of consumer loan products, the continued development and growth of new lending products offered by the Company’s E-Commerce Segment, the development and growth of the Company’s Mexico-based pawn operations, and the prevailing market price of gold. As the Company enters the third quarter of 2013, management anticipates that demand for the Company’s consumer loan products in its Retail Services Segment will continue on a moderate pace similar to the pace we experienced in the second quarter of 2013, which will be partially offset by growth in the E-Commerce Segment. Demand for the Company’s pawn lending products continued to prove challenging in the second quarter and management expects future growth in its pawn lending business, but is reserved about expectations for the remainder of 2013.
Based on its views and on the preceding factors, management expects the third quarter 2013 net income per share to be between 75 cents and 85 cents per share compared to 37 cents per share in the third quarter of 2012, which included unusual items mostly related to the Company’s reorganization of its Mexico based pawn operations in 2012 that reduced net income and earnings per share by $20.4 million and 65 cents per share, respectively. Based on the Company’s results through the first half of 2013, which produced earnings per share of $2.23, and the factors noted above for the remainder of 2013, management expects its fiscal year 2013 earnings per share to be in a range of between $4.15 and $4.35 per share, compared to $3.42 per share in fiscal 2012, which included $25.4 million (81 cents per share) related to the Mexico reorganization, $8.4 million (27 cents per share) related to the Ohio refund expense, and $2.5 million (7 cents per share) related to expenses associated with the July 2012 withdrawal of the Enova International, Inc. proposed initial public offering.
About the Company
As of June 30, 2013, Cash America International, Inc. operated 964 total locations offering specialty financial services to consumers, which included the following:
- 827 lending locations in 22 states in the United States primarily under the names “Cash America Pawn,” “SuperPawn,” “Cash America Payday Advance,” and “Cashland;”
- 47 pawn lending locations in central and southern Mexico under the name “Cash America casa de empeño;” and
- 90 check cashing centers (all of which are unconsolidated franchised check cashing centers) operating in 14 states in the United States under the name “Mr. Payroll.”
Additionally, as of June 30, 2013, the Company offered consumer loans over the Internet to customers:
- in 32 states in the United States at http://www.cashnetusa.com and http://www.netcredit.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.poundstopocket.co.uk | |
http://www.enova.com | http://www.dollarsdirect.com.au | |
http://www.cashnetusa.com | http://www.dollarsdirect.ca | |
http://www.netcredit.com | http://www.goldpromise.com | |
http://www.cashlandloans.com | http://www.mrpayroll.com | |
http://www.quickquid.co.uk |
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This release contains forward-looking statements about the business, financial condition, operations and prospects of 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: the effect of or changes in domestic and foreign pawn, consumer credit, tax and other laws and governmental rules and regulations applicable to the Company's business or changes in the interpretation or enforcement thereof; the anticipated regulation of providers of consumer financial products and services by the Consumer Financial Protection Bureau; public perception of the Company’s business, including its consumer loan business and its business practices; the deterioration of the political, regulatory or economic environment in foreign countries where the Company operates or in the future may operate; fluctuations, including a sustained decrease, in the price of gold or deterioration in economic conditions; the effect of any current or future litigation proceedings or any judicial decisions or rule-making that affect the Company, its products or its arbitration agreements; the actions of third parties who provide, acquire or offer products and services to, from or for the Company; changes in demand for the Company’s services, the Company’s ability to attract and retain qualified 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 ability of the Company to open new locations in accordance with its plans or to successfully integrate newly acquired businesses into the Company’s operations; changes in competition; interest rate and foreign currency exchange rate fluctuations; 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; security breaches, cyber attacks or fraudulent activity; compliance with laws and regulations applicable to international operations; 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 | |||||||||||||||
(dollars in thousands, except per share data) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Consolidated Operations: | |||||||||||||||
Total revenue | $ | 410,951 | $ | 411,644 | $ | 879,079 | $ | 869,132 | |||||||
Net revenue | 244,761 | 233,608 | 516,702 | 490,392 | |||||||||||
Total expenses | 195,513 | 179,377 | 389,868 | 364,153 | |||||||||||
Income from Operations | $ | 49,248 | $ | 54,231 | $ | 126,834 | $ | 126,239 | |||||||
Income before income taxes | 40,390 | 47,283 | 110,106 | 112,114 | |||||||||||
Net Income | $ | 25,444 | $ | 29,220 | $ | 69,366 | $ | 69,743 | |||||||
Net (income) loss attributable to the noncontrolling interest | (312 | ) | 600 | (308 | ) | 1,544 | |||||||||
Net Income Attributable to Cash America International, Inc. | $ | 25,132 | $ | 29,820 | $ | 69,058 | $ | 71,287 | |||||||
Earnings per share: | |||||||||||||||
Net Income attributable to Cash America International, Inc. common shareholders: | |||||||||||||||
Basic | $ | 0.88 | $ | 1.01 | $ | 2.39 | $ | 2.41 | |||||||
Diluted | $ | 0.81 | $ | 0.94 | $ | 2.23 | $ | 2.24 | |||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 28,721 | 29,645 | 28,910 | 29,631 | |||||||||||
Diluted | 30,845 | 31,822 | 31,023 | 31,867 |
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS | |||||||||||||||
(dollars in thousands, except per share data) | |||||||||||||||
(Unaudited) | |||||||||||||||
June 30, | December 31, | ||||||||||||||
2013 | 2012 | 2012 | |||||||||||||
Assets | |||||||||||||||
Current assets: | |||||||||||||||
Cash and cash equivalents | $ | 131,905 | $ | 68,939 | $ | 63,134 | |||||||||
Pawn loans | 229,574 | 232,909 | 244,640 | ||||||||||||
Consumer loans, net | 287,127 | 226,364 | 289,418 | ||||||||||||
Merchandise held for disposition, net | 155,112 | 144,814 | 167,409 | ||||||||||||
Pawn loan fees and service charges receivable | 45,566 | 44,606 | 48,991 | ||||||||||||
Income taxes receivable | 25,495 | - | - | ||||||||||||
Prepaid expenses and other assets | 30,985 | 34,578 | 35,605 | ||||||||||||
Deferred tax assets | 43,628 | 37,846 | 48,992 | ||||||||||||
Total current assets | 949,392 | 790,056 | 898,189 | ||||||||||||
Property and equipment, net | 250,842 | 255,685 | 261,771 | ||||||||||||
Goodwill | 608,242 | 564,313 | 608,216 | ||||||||||||
Intangible assets, net | 34,067 | 32,819 | 36,473 | ||||||||||||
Other assets | 21,571 | 15,503 | 13,609 | ||||||||||||
Total assets | $ | 1,864,114 | $ | 1,658,376 | $ | 1,818,258 | |||||||||
Liabilities and Equity | |||||||||||||||
Current liabilities: | |||||||||||||||
Accounts payable and accrued expenses | $ | 123,037 | $ | 93,569 | $ | 126,664 | |||||||||
Customer deposits | 12,962 | 11,537 | 11,420 | ||||||||||||
Income taxes currently payable | - | 2,135 | 5,922 | ||||||||||||
Current portion of long-term debt | 22,606 | 35,939 | 43,617 | ||||||||||||
Total current liabilities | 158,605 | 143,180 | 187,623 | ||||||||||||
Deferred tax liabilities | 103,759 | 93,930 | 101,711 | ||||||||||||
Noncurrent income tax payable | 36,834 | 2,449 | 2,703 | ||||||||||||
Other liabilities | 1,609 | 1,137 | 888 | ||||||||||||
Long-term debt | 547,218 | 438,462 | 534,713 | ||||||||||||
Total liabilities | $ | 848,025 | $ | 679,158 | $ | 827,638 | |||||||||
Equity: | |||||||||||||||
Cash America International, Inc. equity: | |||||||||||||||
Common stock, $0.10 par value per share, 80,000,000 shares authorized, 30,235,164 shares issued and outstanding | 3,024 | 3,024 | 3,024 | ||||||||||||
Additional paid-in capital | 156,349 | 166,135 | 157,613 | ||||||||||||
Retained earnings | 946,483 | 845,292 | 879,434 | ||||||||||||
Accumulated other comprehensive (loss) income | (362 | ) | (3,988 | ) | 3,128 | ||||||||||
Treasury shares, at cost (2,107,082 shares, 929,223 shares and 1,351,712 shares as of June 30, 2013 and 2012, and as of December 31, 2012, respectively) | (89,405 | ) | (34,861 | ) | (51,304 | ) | |||||||||
Total Cash America International, Inc. shareholders' equity | 1,016,089 | 975,602 | 991,895 | ||||||||||||
Noncontrolling interest | - | 3,616 | (1,275 | ) | |||||||||||
Total equity | 1,016,089 | 979,218 | 990,620 | ||||||||||||
Total liabilities and equity | $ | 1,864,114 | $ | 1,658,376 | $ | 1,818,258 |
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (dollars in thousands, except per share data) (Unaudited) | ||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||
Revenue | ||||||||||||||||||||
Pawn loan fees and service charges | $ | 72,728 | $ | 72,051 | $ | 148,642 | $ | 144,950 | ||||||||||||
Proceeds from disposition of merchandise | 131,532 | 155,956 | 310,249 | 364,339 | ||||||||||||||||
Consumer loan fees | 202,431 | 180,722 | 412,636 | 353,562 | ||||||||||||||||
Other | 4,260 | 2,915 | 7,552 | 6,281 | ||||||||||||||||
Total Revenue | 410,951 | 411,644 | 879,079 | 869,132 | ||||||||||||||||
Cost of Revenue | ||||||||||||||||||||
Disposed merchandise | 88,961 | 105,639 | 210,296 | 243,960 | ||||||||||||||||
Consumer loan loss provision | 77,229 | 72,397 | 152,081 | 134,780 | ||||||||||||||||
Total Cost of Revenue | 166,190 | 178,036 | 362,377 | 378,740 | ||||||||||||||||
Net Revenue | 244,761 | 233,608 | 516,702 | 490,392 | ||||||||||||||||
Expenses | ||||||||||||||||||||
Operations and administration | 177,513 | 164,190 | 354,337 | 334,345 | ||||||||||||||||
Depreciation and amortization | 18,000 | 15,187 | 35,531 | 29,808 | ||||||||||||||||
Total Expenses | 195,513 | 179,377 | 389,868 | 364,153 | ||||||||||||||||
Income from Operations | 49,248 | 54,231 | 126,834 | 126,239 | ||||||||||||||||
Interest expense | (8,903 | ) | (6,693 | ) | (16,348 | ) | (13,869 | ) | ||||||||||||
Interest income | 5 | 28 | 68 | 57 | ||||||||||||||||
Foreign currency transaction gain (loss) | 65 | (252 | ) | (312 | ) | (165 | ) | |||||||||||||
Equity in loss of unconsolidated subsidiary | (25 | ) | (31 | ) | (136 | ) | (148 | ) | ||||||||||||
Income before Income Taxes | 40,390 | 47,283 | 110,106 | 112,114 | ||||||||||||||||
Provision for income taxes | 14,946 | 18,063 | 40,740 | 42,371 | ||||||||||||||||
Net Income | 25,444 | 29,220 | 69,366 | 69,743 | ||||||||||||||||
Net (income) loss attributable to the noncontrolling interest | (312 | ) | 600 | (308 | ) | 1,544 | ||||||||||||||
Net Income Attributable to Cash America International, Inc. | $ | 25,132 | $ | 29,820 | $ | 69,058 | $ | 71,287 | ||||||||||||
Earnings Per Share: | ||||||||||||||||||||
Net Income attributable to Cash America International, Inc. common shareholders: | ||||||||||||||||||||
Basic | $ | 0.88 | $ | 1.01 | $ | 2.39 | $ | 2.41 | ||||||||||||
Diluted | $ | 0.81 | $ | 0.94 | $ | 2.23 | $ | 2.24 | ||||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||
Basic | 28,721 | 29,645 | 28,910 | 29,631 | ||||||||||||||||
Diluted | 30,845 | 31,822 | 31,023 | 31,867 | ||||||||||||||||
Dividends declared per common share | $ | 0.035 | $ | 0.035 | $ | 0.070 | $ | 0.070 |
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES PAWN LENDING ACTIVITIES – FINANCIAL AND OPERATING DATA | |||||||||||||||||||
The following tables outline certain data related to the pawn loan activities of Cash America International, Inc. and its subsidiaries (the “Company”) as of and for the three and six months ended June 30, 2013 and 2012 (dollars in thousands). | |||||||||||||||||||
As of June 30, | |||||||||||||||||||
2013 | 2012 | Change | % Change | ||||||||||||||||
Ending pawn loan balances | |||||||||||||||||||
Domestic retail services | $ | 224,622 | $ | 221,572 | $ | 3,050 | 1.4 | % | |||||||||||
Foreign retail services | 4,952 | 11,337 | (6,385 | ) | (56.3 | )% | |||||||||||||
Consolidated pawn loan balances | $ | 229,574 | $ | 232,909 | $ | (3,335 | ) | (1.4 | )% | ||||||||||
Ending merchandise balance, net | |||||||||||||||||||
Domestic retail services | $ | 149,244 | $ | 132,758 | $ | 16,486 | 12.4 | % | |||||||||||
Foreign retail services | 5,868 | 12,056 | (6,188 | ) | (51.3 | )% | |||||||||||||
Consolidated merchandise balance, net | $ | 155,112 | $ | 144,814 | $ | 10,298 | 7.1 | % | |||||||||||
Three Months Ended June 30, | |||||||||||||||||||
2013 | 2012 | Change | % Change | ||||||||||||||||
Pawn loan fees and service charges | |||||||||||||||||||
Domestic retail services | $ | 70,802 | $ | 68,185 | $ | 2,617 | 3.8 | % | |||||||||||
Foreign retail services | 1,926 | 3,866 | (1,940 | ) | (50.2 | )% | |||||||||||||
Consolidated pawn loan fees and service charges | $ | 72,728 | $ | 72,051 | $ | 677 | 0.9 | % | |||||||||||
Average pawn loan balance outstanding | |||||||||||||||||||
Domestic retail services | $ | 211,195 | $ | 207,195 | $ | 4,000 | 1.9 | % | |||||||||||
Foreign retail services | 5,237 | 13,661 | (8,424 | ) | (61.7 | )% | |||||||||||||
Consolidated average pawn loans outstanding | $ | 216,432 | $ | 220,856 | $ | (4,424 | ) | (2.0 | )% | ||||||||||
Amount of pawn loans written and renewed | |||||||||||||||||||
Domestic retail services | $ | 234,327 | $ | 231,354 | $ | 2,973 | 1.3 | % | |||||||||||
Foreign retail services | 15,166 | 32,240 | (17,074 | ) | (53.0 | )% | |||||||||||||
Consolidated amount of pawn loans written and renewed | $ | 249,493 | $ | 263,594 | $ | (14,101 | ) | (5.3 | )% | ||||||||||
Average amount per pawn loan (in ones) | |||||||||||||||||||
Domestic retail services | $ | 126 | $ | 129 | $ | (3 | ) | (2.3 | )% | ||||||||||
Foreign retail services | $ | 89 | $ | 84 | $ | 5 | 6.0 | % | |||||||||||
Consolidated average amount per pawn loan (in ones) | $ | 123 | $ | 121 | $ | 2 | 1.7 | % | |||||||||||
Annualized yield on pawn loans | |||||||||||||||||||
Domestic retail services | 134.5 | % | 132.4 | % | |||||||||||||||
Foreign retail services | 147.5 | % | 113.8 | % | |||||||||||||||
Consolidated annualized yield on pawn loans | 134.8 | % | 131.2 | % | |||||||||||||||
Gross profit margin on disposition of merchandise | |||||||||||||||||||
Domestic retail services | 32.9 | % | 34.0 | % | |||||||||||||||
Foreign retail services | 16.4 | % | 10.3 | % | |||||||||||||||
Gross profit margin on disposition of merchandise | 32.4 | % | 32.3 | % | |||||||||||||||
Merchandise turnover | |||||||||||||||||||
Domestic retail services | 2.4 | 2.9 | |||||||||||||||||
Foreign retail services | 2.6 | 3.5 | |||||||||||||||||
Consolidated merchandise turnover | 2.4 | 3.0 |
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES PAWN LENDING ACTIVITIES – FINANCIAL AND OPERATING DATA | |||||||||||||||||||
Six Months Ended June 30, | |||||||||||||||||||
2013 | 2012 | Change | % Change | ||||||||||||||||
Pawn loan fees and service charges | |||||||||||||||||||
Domestic retail services | $ | 144,976 | $ | 137,598 | $ | 7,378 | 5.4 | % | |||||||||||
Foreign retail services | 3,666 | 7,352 | (3,686 | ) | (50.1 | )% | |||||||||||||
Consolidated pawn loan fees and service charges | $ | 148,642 | $ | 144,950 | $ | 3,692 | 2.5 | % | |||||||||||
Average pawn loan balance outstanding | |||||||||||||||||||
Domestic retail services | $ | 219,709 | $ | 214,058 | $ | 5,651 | 2.6 | % | |||||||||||
Foreign retail services | 4,858 | 14,613 | (9,755 | ) | (66.8 | )% | |||||||||||||
Consolidated average pawn loans outstanding | $ | 224,567 | $ | 228,671 | $ | (4,104 | ) | (1.8 | )% | ||||||||||
Amount of pawn loans written and renewed | |||||||||||||||||||
Domestic retail services | $ | 449,703 | $ | 436,809 | $ | 12,894 | 3.0 | % | |||||||||||
Foreign retail services | 28,259 | 69,636 | (41,377 | ) | (59.4 | )% | |||||||||||||
Consolidated amount of pawn loans written and renewed | $ | 477,962 | $ | 506,445 | $ | (28,483 | ) | (5.6 | )% | ||||||||||
Average amount per pawn loan (in ones) | |||||||||||||||||||
Domestic retail services | $ | 128 | $ | 130 | $ | (2 | ) | (1.5 | )% | ||||||||||
Foreign retail services | $ | 87 | $ | 92 | $ | (5 | ) | (5.4 | )% | ||||||||||
Consolidated average amount per pawn loan (in ones) | $ | 124 | $ | 123 | $ | 1 | 0.8 | % | |||||||||||
Annualized yield on pawn loans | |||||||||||||||||||
Domestic retail services | 133.1 | % | 129.3 | % | |||||||||||||||
Foreign retail services | 152.2 | % | 101.2 | % | |||||||||||||||
Consolidated annualized yield on pawn loans | 133.5 | % | 127.5 | % | |||||||||||||||
Gross profit margin on disposition of merchandise | |||||||||||||||||||
Domestic retail services | 32.6 | % | 34.7 | % | |||||||||||||||
Foreign retail services | 18.3 | % | 10.0 | % | |||||||||||||||
Consolidated gross profit margin on disposition of merchandise | 32.2 | % | 33.0 | % | |||||||||||||||
Merchandise turnover | |||||||||||||||||||
Domestic retail services | 2.7 | 3.2 | |||||||||||||||||
Foreign retail services | 2.6 | 3.8 | |||||||||||||||||
Consolidated merchandise turnover | 2.7 | 3.3 |
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES | |||||||||||||||||||||||||
Profit from the disposition of merchandise represents the proceeds received from the disposition of merchandise in excess of the cost of disposed merchandise, which is the Company's cost basis in the pawn loan or the amount paid for purchased merchandise. The following tables summarize the proceeds from the disposition of merchandise and the related profit for the three and six months ended June 30, 2013 and 2012 (dollars in thousands). | |||||||||||||||||||||||||
Three Months Ended June 30, | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Retail | Commercial | Total | Retail | Commercial | Total | ||||||||||||||||||||
Proceeds from disposition | $ | 89,836 | $ | 41,696 | $ | 131,532 | $ | 83,623 | $ | 72,333 | $ | 155,956 | |||||||||||||
Gross profit on disposition | $ | 33,385 | $ | 9,186 | $ | 42,571 | $ | 31,701 | $ | 18,616 | $ | 50,317 | |||||||||||||
Gross profit margin | 37.2 | % | 22.0 | % | 32.4 | % | 37.9 | % | 25.7 | % | 32.3 | % | |||||||||||||
Percentage of total gross profit | 78.4 | % | 21.6 | % | 100.0 | % | 63.0 | % | 37.0 | % | 100.0 | % | |||||||||||||
Six Months Ended June 30, | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Retail | Commercial | Total | Retail | Commercial | Total | ||||||||||||||||||||
Proceeds from disposition | $ | 202,246 | $ | 108,003 | $ | 310,249 | $ | 195,655 | $ | 168,684 | $ | 364,339 | |||||||||||||
Gross profit on disposition | $ | 75,375 | $ | 24,578 | $ | 99,953 | $ | 73,447 | $ | 46,932 | $ | 120,379 | |||||||||||||
Gross profit margin | 37.3 | % | 22.8 | % | 32.2 | % | 37.5 | % | 27.8 | % | 33.0 | % | |||||||||||||
Percentage of total gross profit | 75.4 | % | 24.6 | % | 100.0 | % | 61.0 | % | 39.0 | % | 100.0 | % | |||||||||||||
The following table summarizes the age of merchandise held for disposition before valuation allowance of $0.9 million and $0.7 million as of June 30, 2013 and 2012, respectively (dollars in thousands).
As of June 30, | |||||||||||||||
2013 | 2012 | ||||||||||||||
Amount | % | Amount | % | ||||||||||||
Jewelry - held for one year or less | $ | 90,105 | 57.8 | $ | 89,125 | 61.3 | |||||||||
Other merchandise - held for one year or less | 56,398 | 36.1 | 49,666 | 34.1 | |||||||||||
Total merchandise held for one year or less | 146,503 | 93.9 | 138,791 | 95.4 | |||||||||||
Jewelry - held for more than one year | 3,856 | 2.4 | 2,562 | 1.8 | |||||||||||
Other merchandise - held for more than one year | 5,702 | 3.7 | 4,161 | 2.8 | |||||||||||
Total merchandise held for more than one year | 9,558 | 6.1 | 6,723 | 4.6 | |||||||||||
Total merchandise held for disposition | $ | 156,061 | 100.0 | $ | 145,514 | 100.0 | |||||||||
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSUMER LOAN FINANCIAL AND OPERATING DATA | |||||||||||||||||||||||||
The following tables set forth consumer loan fees by segment, adjusted for the deduction of the loan loss provision for the three and six months ended June 30, 2013 and 2012 (dollars in thousands, except where otherwise noted). | |||||||||||||||||||||||||
Three Months Ended June 30, | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Retail | E-Commerce | Total | Retail | E-Commerce | Total | ||||||||||||||||||||
Interest and fees on short-term loans | $ | 23,529 | $ | 103,031 | $ | 126,560 | $ | 25,894 | $ | 112,046 | $ | 137,940 | |||||||||||||
Interest and fees on line of credit accounts | - | 28,283 | 28,283 | - | 14,270 | 14,270 | |||||||||||||||||||
Interest and fees on installment loans | 3,118 | 44,470 | 47,588 | 2,685 | 25,827 | 28,512 | |||||||||||||||||||
Consumer loan fees | $ | 26,647 | $ | 175,784 | $ | 202,431 | $ | 28,579 | $ | 152,143 | $ | 180,722 | |||||||||||||
Consumer loan loss provision | 7,112 | 70,117 | 77,229 | 6,603 | 65,794 | 72,397 | |||||||||||||||||||
Consumer loan fees, net of loss provision | $ | 19,535 | $ | 105,667 | $ | 125,202 | $ | 21,976 | $ | 86,349 | $ | 108,325 | |||||||||||||
Year-over-year change - $ | $ | (2,441) | $ | 19,318 | $ | 16,877 | $ | (588) | $ | 21,628 | $ | 21,040 | |||||||||||||
Year-over-year change - % | (11.1) | % | 22.4 | % | 15.6 | % | (2.6) | % | 33.4 | % | 24.1 | % | |||||||||||||
Consumer loan loss provision as a % of consumer loan fees
| 26.7 | % | 39.9 | % | 38.2 | % | 23.1 | % | 43.2 | % | 40.1 | % | |||||||||||||
Six Months Ended June 30, | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Retail | E-Commerce | Total | Retail | E-Commerce | Total | ||||||||||||||||||||
Interest and fees on short-term loans | $ | 48,736 | $ | 218,039 | $ | 266,775 | $ | 52,805 | $ | 221,777 | $ | 274,582 | |||||||||||||
Interest and fees on line of credit accounts | - | 51,517 | 51,517 | - | 25,921 | 25,921 | |||||||||||||||||||
Interest and fees on installment loans | 6,233 | 88,111 | 94,344 | 5,146 | 47,913 | 53,059 | |||||||||||||||||||
Consumer loan fees | $ | 54,969 | $ | 357,667 | $ | 412,636 | $ | 57,951 | $ | 295,611 | $ | 353,562 | |||||||||||||
Consumer loan loss provision | 13,890 | 138,191 | 152,081 | 11,069 | 123,711 | 134,780 | |||||||||||||||||||
Consumer loan fees, net of loss provision | $ | 41,079 | $ | 219,476 | $ | 260,555 | $ | 46,882 | $ | 171,900 | $ | 218,782 | |||||||||||||
Year-over-year change - $ | $ | (5,803) | $ | 47,576 | $ | 41,773 | $ | 1,666 | $ | 46,204 | $ | 47,870 | |||||||||||||
Year-over-year change - % | (12.4) | % | 27.7 | % | 19.1 | % | 3.7 | % | 36.8 | % | 28.0 | % | |||||||||||||
Consumer loan loss provision as a % of consumer loan fees | 25.3 | % | 38.6 | % | 36.9 | % | 19.1 | % | 41.8 | % | 38.1 | % | |||||||||||||
In addition to reporting consumer loans owned by the Company and consumer loans guaranteed by the Company, which are either generally accepted accounting principles (“GAAP”) items or disclosures required by GAAP, the Company has provided combined consumer loans, which is a non-GAAP measure. In addition, the Company has reported consumer loans written and renewed, which is statistical data that is not included in the Company’s financial statements. The Company also reports allowances and liabilities for estimated losses on consumer loans individually and on a combined basis, which are GAAP measures that are included in the Company’s financial statements.
Management believes these measures provide investors with important information needed to evaluate the magnitude of potential loan losses and the opportunity for revenue performance of the consumer loan portfolio on an aggregate basis. Management believes the comparison of the aggregate amounts from period to period is more meaningful than comparing only the residual amount on the Company’s balance sheet since both revenue and the consumer loan loss provision are impacted by the aggregate amount of loans owned by the Company and those guaranteed by the Company as reflected in its financial statements.
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSUMER LOAN FINANCIAL AND OPERATING DATA | |||||||||||||||||||||||||||||||||||
The following tables summarize selected data related to the Company’s consumer loan activities as of and for the three and six months ended June 30, 2013 and 2012 (dollars in thousands, except where otherwise noted). | |||||||||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||||||||||
Combined consumer loan loss provision as a % of combined consumer loans written and renewed(a) | 9.3 | % | 8.8 | % | 9.2 | % | 8.4 | % | |||||||||||||||||||||||||||
Charge-offs (net of recoveries) as a % of combined consumer loans written and renewed(a) | 8.9 | % | 7.2 | % | 9.5 | % | 8.0 | % | |||||||||||||||||||||||||||
Combined consumer loan loss provision as a % of consumer loan fees | 38.2 | % | 40.1 | % | 36.9 | % | 38.1 | % | |||||||||||||||||||||||||||
(a) | The disclosure regarding the amount and number of consumer loans written and renewed is statistical data that is not included in the Company’s financial statements. | ||||||||||||||||||||||||||||||||||
As of June 30, | |||||||||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||||||||
Company | Guaranteed | Combined(b) | Company | Guaranteed | Combined(b) | ||||||||||||||||||||||||||||||
Ending consumer loan balances: | |||||||||||||||||||||||||||||||||||
Retail Services | |||||||||||||||||||||||||||||||||||
Short-term loans | $ | 45,324 | $ | 5,338 | $ | 50,662 | $ | 46,700 | $ | 7,055 | $ | 53,755 | |||||||||||||||||||||||
Installment loans | 9,819 | 10,131 | 19,950 | 9,146 | 6,296 | 15,442 | |||||||||||||||||||||||||||||
Total Retail Services, gross | 55,143 | 15,469 | 70,612 | 55,846 | 13,351 | 69,197 | |||||||||||||||||||||||||||||
E-Commerce | |||||||||||||||||||||||||||||||||||
Domestic | |||||||||||||||||||||||||||||||||||
Short-term loans | 31,594 | 35,115 | 66,709 | 35,644 | 37,093 | 72,737 | |||||||||||||||||||||||||||||
Line of credit accounts | 47,368 | - | 47,368 | 30,595 | - | 30,595 | |||||||||||||||||||||||||||||
Installment loans | 44,509 | - | 44,509 | 25,795 | - | 25,795 | |||||||||||||||||||||||||||||
Total Domestic, gross | 123,471 | 35,115 | 158,586 | 92,034 | 37,093 | 129,127 | |||||||||||||||||||||||||||||
Foreign | |||||||||||||||||||||||||||||||||||
Short-term loans | 91,240 | 301 | 91,541 | 94,411 | 3,541 | 97,952 | |||||||||||||||||||||||||||||
Line of credit accounts | 10,703 | - | 10,703 | - | - | - | |||||||||||||||||||||||||||||
Installment loans | 86,433 | - | 86,433 | 54,644 | - | 54,644 | |||||||||||||||||||||||||||||
Total Foreign, gross | 188,376 | 301 | 188,677 | 149,055 | 3,541 | 152,596 | |||||||||||||||||||||||||||||
Total E-Commerce, gross | 311,847 | 35,416 | 347,263 | 241,089 | 40,634 | 281,723 | |||||||||||||||||||||||||||||
Total ending loan balance, gross | 366,990 | 50,885 | 417,875 | 296,935 | 53,985 | 350,920 | |||||||||||||||||||||||||||||
Less: Allowance and liabilities for losses | (79,863 | ) | (3,047 | ) | (82,910 | ) | (70,571 | ) | (2,795 | ) | (73,366 | ) | |||||||||||||||||||||||
Total ending loan balance, net | $ | 287,127 | $ | 47,838 | $ | 334,965 | $ | 226,364 | $ | 51,190 | $ | 277,554 | |||||||||||||||||||||||
Allowance and liability for losses as a % of consumer loan balances, gross(c) | 21.8 | % | 6.0 | % | 19.8 | % | 23.8 | % | 5.2 | % | 20.9 | % | |||||||||||||||||||||||
(a) | GAAP measure. The consumer loan balances guaranteed by the Company represent loans originated by third-party lenders through the Company's credit services organization programs (the “CSO programs”), so these balances are not recorded in the Company’s financial statements. However, the Company has established a liability for estimated losses in support of its guarantee of these loans, which is reflected in the table above and included in its financial statements. | ||||||||||||||||||||||||||||||||||
(b) | Except for allowance and liability for estimated losses, amounts represent non-GAAP measures. | ||||||||||||||||||||||||||||||||||
(c) | Non-GAAP measure. |
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES | |||||||||||||||||||||
The following tables summarize the consumer loans written and renewed for the three and six months ended June 30, 2013 and 2012 (dollars in thousands, except where otherwise noted). | |||||||||||||||||||||
Three Months Ended June 30, | |||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||
Company | Guaranteed | Combined(a) | Company | Guaranteed | Combined(a) | ||||||||||||||||
Amount of consumer loans written and renewed (dollars in thousands): | |||||||||||||||||||||
Retail Services | |||||||||||||||||||||
Short-term loans | $ | 167,896 | $ | 26,446 | $ | 194,342 | $ | 177,924 | $ | 35,295 | $ | 213,219 | |||||||||
Installment loans | 2,051 | 5,274 | 7,325 | 2,153 | 4,296 | 6,449 | |||||||||||||||
Total Retail Services | 169,947 | 31,720 | 201,667 | 180,077 | 39,591 | 219,668 | |||||||||||||||
E-Commerce | |||||||||||||||||||||
Domestic | |||||||||||||||||||||
Short-term loans | 71,507 | 163,236 | 234,743 | 85,007 | 181,120 | 266,127 | |||||||||||||||
Line of credit accounts | 37,649 | - | 37,649 | 29,136 | - | 29,136 | |||||||||||||||
Installment loans | 31,385 | - | 31,385 | 16,101 | - | 16,101 | |||||||||||||||
Total Domestic | 140,541 | 163,236 | 303,777 | 130,244 | 181,120 | 311,364 | |||||||||||||||
Foreign | |||||||||||||||||||||
Short-term loans | 249,953 | 739 | 250,692 | 246,373 | 17,251 | 263,624 | |||||||||||||||
Line of credit accounts | 13,484 | - | 13,484 | - | - | - | |||||||||||||||
Installment loans | 64,665 | - | 64,665 | 31,728 | - | 31,728 | |||||||||||||||
Total Foreign | 328,102 | 739 | 328,841 | 278,101 | 17,251 | 295,352 | |||||||||||||||
Total E-Commerce | 468,643 | 163,975 | 632,618 | 408,345 | 198,371 | 606,716 | |||||||||||||||
Total amount of consumer loans written and renewed | $ | 638,590 | $ | 195,695 | $ | 834,285 | $ | 588,422 | $ | 237,962 | $ | 826,384 | |||||||||
Number of consumer loans written and renewed (in ones): | |||||||||||||||||||||
Retail Services | |||||||||||||||||||||
Short-term loans | 354,546 | 51,763 | 406,309 | 381,179 | 64,945 | 446,124 | |||||||||||||||
Installment loans | 1,798 | 928 | 2,726 | 1,943 | 567 | 2,510 | |||||||||||||||
Total Retail Services | 356,344 | 52,691 | 409,035 | 383,122 | 65,512 | 448,634 | |||||||||||||||
E-Commerce | |||||||||||||||||||||
Domestic | |||||||||||||||||||||
Short-term loans | 242,617 | 227,956 | 470,573 | 270,049 | 250,776 | 520,825 | |||||||||||||||
Line of credit accounts | 139,550 | - | 139,550 | 100,144 | - | 100,144 | |||||||||||||||
Installment loans | 30,229 | - | 30,229 | 15,796 | - | 15,796 | |||||||||||||||
Total Domestic | 412,396 | 227,956 | 640,352 | 385,989 | 250,776 | 636,765 | |||||||||||||||
Foreign | |||||||||||||||||||||
Short-term loans | 454,293 | 919 | 455,212 | 473,060 | 23,144 | 496,204 | |||||||||||||||
Line of credit accounts | 30,748 | - | 30,748 | - | - | - | |||||||||||||||
Installment loans | 56,679 | - | 56,679 | 28,421 | - | 28,421 | |||||||||||||||
Total Foreign | 541,720 | 919 | 542,639 | 501,481 | 23,144 | 524,625 | |||||||||||||||
Total E-Commerce | 954,116 | 228,875 | 1,182,991 | 887,470 | 273,920 | 1,161,390 | |||||||||||||||
Total number of consumer loans written and renewed | 1,310,460 | 281,566 | 1,592,026 | 1,270,592 | 339,432 | 1,610,024 | |||||||||||||||
(a) | The disclosure regarding the amount and number of consumer loans written and renewed is statistical data that is not included in the Company’s financial statements. | ||||||||||||||||||||
(b) | Loans guaranteed by the Company represent loans originated by third-party lenders through the CSO programs. |
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSUMER LOAN FINANCIAL AND OPERATING DATA | |||||||||||||||||||||
Six Months Ended June 30, | |||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||
Company | Guaranteed | Combined(a) | Company | Guaranteed | Combined(a) | ||||||||||||||||
Amount of consumer loans written and renewed (dollars in thousands):
| |||||||||||||||||||||
Retail Services | |||||||||||||||||||||
Short-term loans | $ | 339,816 | $ | 54,772 | $ | 394,588 | $ | 353,598 | $ | 72,662 | $ | 426,260 | |||||||||
Installment loans | 3,497 | 8,986 | 12,483 | 3,664 | 6,156 | 9,820 | |||||||||||||||
Total Retail Services | 343,313 | 63,758 | 407,071 | 357,262 | 78,818 | 436,080 | |||||||||||||||
E-Commerce | |||||||||||||||||||||
Domestic | |||||||||||||||||||||
Short-term loans | 144,135 | 337,502 | 481,637 | 166,688 | 343,402 | 510,090 | |||||||||||||||
Line of credit accounts | 66,455 | - | 66,455 | 47,513 | - | 47,513 | |||||||||||||||
Installment loans | 56,056 | - | 56,056 | 27,367 | - | 27,367 | |||||||||||||||
Total Domestic | 266,646 | 337,502 | 604,148 | 241,568 | 343,402 | 584,970 | |||||||||||||||
Foreign | |||||||||||||||||||||
Short-term loans | 516,280 | 13,971 | 530,251 | 486,895 | 35,048 | 521,943 | |||||||||||||||
Line of credit accounts | 13,484 | - | 13,484 | - | - | - | |||||||||||||||
Installment loans | 105,250 | - | 105,250 | 56,410 | - | 56,410 | |||||||||||||||
Total Foreign | 635,014 | 13,971 | 648,985 | 543,305 | 35,048 | 578,353 | |||||||||||||||
Total E-Commerce | 901,660 | 351,473 | 1,253,133 | 784,873 | 378,450 | 1,163,323 | |||||||||||||||
Total amount of consumer loans written and renewed: | $ | 1,244,973 | $ | 415,231 | $ | 1,660,204 | $ | 1,142,135 | $ | 457,268 | $ | 1,599,403 | |||||||||
Number of consumer loans written and renewed (in ones): | |||||||||||||||||||||
Retail Services | |||||||||||||||||||||
Short-term loans | 709,859 | 105,752 | 815,611 | 750,563 | 131,676 | 882,239 | |||||||||||||||
Installment loans | 3,194 | 1,562 | 4,756 | 3,480 | 844 | 4,324 | |||||||||||||||
Total Retail Services | 713,053 | 107,314 | 820,367 | 754,043 | 132,520 | 886,563 | |||||||||||||||
E-Commerce | |||||||||||||||||||||
Domestic | |||||||||||||||||||||
Short-term loans | 485,865 | 463,178 | 949,043 | 515,493 | 469,902 | 985,395 | |||||||||||||||
Line of credit accounts | 251,201 | - | 251,201 | 171,085 | - | 171,085 | |||||||||||||||
Installment loans | 53,414 | - | 53,414 | 25,811 | - | 25,811 | |||||||||||||||
Total Domestic | 790,480 | 463,178 | 1,253,658 | 712,389 | 469,902 | 1,182,291 | |||||||||||||||
Foreign | |||||||||||||||||||||
Short-term loans | 921,197 | 18,235 | 939,432 | 925,263 | 46,499 | 971,762 | |||||||||||||||
Line of credit accounts | 30,748 | - | 30,748 | - | - | - | |||||||||||||||
Installment loans | 89,754 | - | 89,754 | 50,203 | - | 50,203 | |||||||||||||||
Total Foreign | 1,041,699 | 18,235 | 1,059,934 | 975,466 | 46,499 | 1,021,965 | |||||||||||||||
Total E-Commerce | 1,832,179 | 481,413 | 2,313,592 | 1,687,855 | 516,401 | 2,204,256 | |||||||||||||||
Total number of consumer loans written and renewed | 2,545,232 | 588,727 | 3,133,959 | 2,441,898 | 648,921 | 3,090,819 | |||||||||||||||
(a) | The disclosure regarding the amount and number of consumer loans written and renewed is statistical data that is not included in the Company’s financial statements. | ||||||||||||||||||||
(b) | Loans guaranteed by the Company represent loans originated by third-party lenders through the CSO programs. |
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES INCOME FROM OPERATIONS BY OPERATING SEGMENT | ||||||||||||||||||||||||||||
The following tables contain operating segment data for the three and six months ended June 30, 2013 and 2012 by segment, for the Company’s corporate operations and on a consolidated basis (dollars in thousands). | ||||||||||||||||||||||||||||
Retail Services | E-Commerce | |||||||||||||||||||||||||||
Domestic | Foreign | Total | Domestic | Foreign | Total | Corporate | Consolidated | |||||||||||||||||||||
Three Months Ended June 30, 2013 | ||||||||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||||
Pawn loan fees and service charges | $ | 70,802 | $ | 1,926 | $ | 72,728 | $ | - | $ | - | $ | - | $ | - | $ | 72,728 | ||||||||||||
Proceeds from disposition of merchandise | 127,214 | 4,318 | 131,532 | - | - | - | - | 131,532 | ||||||||||||||||||||
Consumer loan fees | 26,647 | - | 26,647 | 87,502 | 88,282 | 175,784 | - | 202,431 | ||||||||||||||||||||
Other | 1,918 | 829 | 2,747 | 361 | 16 | 377 | 1,136 | 4,260 | ||||||||||||||||||||
Total revenue | 226,581 | 7,073 | 233,654 | 87,863 | 88,298 | 176,161 | 1,136 | 410,951 | ||||||||||||||||||||
Cost of revenue | ||||||||||||||||||||||||||||
Disposed merchandise | 85,352 | 3,609 | 88,961 | - | - | - | - | 88,961 | ||||||||||||||||||||
Consumer loan loss provision | 7,112 | - | 7,112 | 33,343 | 36,774 | 70,117 | - | 77,229 | ||||||||||||||||||||
Total cost of revenue | 92,464 | 3,609 | 96,073 | 33,343 | 36,774 | 70,117 | - | 166,190 | ||||||||||||||||||||
Net revenue | 134,117 | 3,464 | 137,581 | 54,520 | 51,524 | 106,044 | 1,136 | 244,761 | ||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||||
Operations and administration | 89,487 | 3,569 | 93,056 | 30,489 | 34,618 | 65,107 | 19,350 | 177,513 | ||||||||||||||||||||
Depreciation and amortization | 8,900 | 430 | 9,330 | 3,750 | 835 | 4,585 | 4,085 | 18,000 | ||||||||||||||||||||
Total expenses | 98,387 | 3,999 | 102,386 | 34,239 | 35,453 | 69,692 | 23,435 | 195,513 | ||||||||||||||||||||
Income (loss) from operations | $ | 35,730 | $ | (535 | ) | $ | 35,195 | $ | 20,281 | $ | 16,071 | $ | 36,352 | $ | (22,299 | ) | $ | 49,248 | ||||||||||
As of June 30, 2013 | ||||||||||||||||||||||||||||
Total assets | $ | 1,023,015 | $ | 123,601 | $ | 1,146,616 | $ | 389,155 | $ | 195,532 | $ | 584,687 | $ | 132,811 | $ | 1,864,114 | ||||||||||||
Goodwill | $ | 397,876 | $ | 210,366 | $ | 608,242 | ||||||||||||||||||||||
Retail Services | E-Commerce | |||||||||||||||||||||||||||
Domestic | Foreign | Total | Domestic | Foreign | Total | Corporate | Consolidated | |||||||||||||||||||||
Three Months Ended June 30, 2012 | ||||||||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||||
Pawn loan fees and service charges | $ | 68,185 | $ | 3,866 | $ | 72,051 | $ | - | $ | - | $ | - | $ | - | $ | 72,051 | ||||||||||||
Proceeds from disposition of merchandise | 144,484 | 11,472 | 155,956 | - | - | - | - | 155,956 | ||||||||||||||||||||
Consumer loan fees | 28,579 | - | 28,579 | 73,802 | 78,341 | 152,143 | - | 180,722 | ||||||||||||||||||||
Other | 2,185 | 211 | 2,396 | 288 | 11 | 299 | 220 | 2,915 | ||||||||||||||||||||
Total revenue | 243,433 | 15,549 | 258,982 | 74,090 | 78,352 | 152,442 | 220 | 411,644 | ||||||||||||||||||||
Cost of revenue | ||||||||||||||||||||||||||||
Disposed merchandise | 95,345 | 10,294 | 105,639 | - | - | - | - | 105,639 | ||||||||||||||||||||
Consumer loan loss provision | 6,603 | - | 6,603 | 30,643 | 35,151 | 65,794 | - | 72,397 | ||||||||||||||||||||
Total cost of revenue | 101,948 | 10,294 | 112,242 | 30,643 | 35,151 | 65,794 | - | 178,036 | ||||||||||||||||||||
Net revenue | 141,485 | 5,255 | 146,740 | 43,447 | 43,201 | 86,648 | 220 | 233,608 | ||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||||
Operations and administration | 88,204 | 7,822 | 96,026 | 25,773 | 27,778 | 53,551 | 14,613 | 164,190 | ||||||||||||||||||||
Depreciation and amortization | 7,514 | 1,121 | 8,635 | 2,727 | 300 | 3,027 | 3,525 | 15,187 | ||||||||||||||||||||
Total expenses | 95,718 | 8,943 | 104,661 | 28,500 | 28,078 | 56,578 | 18,138 | 179,377 | ||||||||||||||||||||
Income (loss) from operations | $ | 45,767 | $ | (3,688 | ) | $ | 42,079 | $ | 14,947 | $ | 15,123 | $ | 30,070 | $ | (17,918 | ) | $ | 54,231 | ||||||||||
As of June 30, 2012 | ||||||||||||||||||||||||||||
Total assets | $ | 900,302 | $ | 113,498 | $ | 1,013,800 | $ | 360,912 | $ | 152,888 | $ | 513,800 | $ | 130,776 | $ | 1,658,376 | ||||||||||||
Goodwill | $ | 353,945 | $ | 210,368 | $ | 564,313 |
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES INCOME FROM OPERATIONS BY OPERATING SEGMENT (dollars in thousands) | ||||||||||||||||||||||||||||
Retail Services | E-Commerce | |||||||||||||||||||||||||||
Domestic | Foreign | Total | Domestic | Foreign | Total | Corporate | Consolidated | |||||||||||||||||||||
Six Months Ended June 30, 2013 | ||||||||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||||
Pawn loan fees and service charges | $ | 144,976 | $ | 3,666 | $ | 148,642 | $ | - | $ | - | $ | - | $ | - | $ | 148,642 | ||||||||||||
Proceeds from disposition of merchandise | 301,364 | 8,885 | 310,249 | - | - | - | - | 310,249 | ||||||||||||||||||||
Consumer loan fees | 54,969 | - | 54,969 | 178,143 | 179,524 | 357,667 | - | 412,636 | ||||||||||||||||||||
Other | 4,418 | 922 | 5,340 | 802 | 23 | 825 | 1,387 | 7,552 | ||||||||||||||||||||
Total revenue | 505,727 | 13,473 | 519,200 | 178,945 | 179,547 | 358,492 | 1,387 | 879,079 | ||||||||||||||||||||
Cost of revenue | ||||||||||||||||||||||||||||
Disposed merchandise | 203,039 | 7,257 | 210,296 | - | - | - | - | 210,296 | ||||||||||||||||||||
Consumer loan loss provision | 13,890 | - | 13,890 | 63,166 | 75,025 | 138,191 | - | 152,081 | ||||||||||||||||||||
Total cost of revenue | 216,929 | 7,257 | 224,186 | 63,166 | 75,025 | 138,191 | - | 362,377 | ||||||||||||||||||||
Net revenue | 288,798 | 6,216 | 295,014 | 115,779 | 104,522 | 220,301 | 1,387 | 516,702 | ||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||||
Operations and administration | 180,189 | 7,172 | 187,361 | 61,244 | 69,445 | 130,689 | 36,287 | 354,337 | ||||||||||||||||||||
Depreciation and amortization | 17,701 | 829 | 18,530 | 7,633 | 1,395 | 9,028 | 7,973 | 35,531 | ||||||||||||||||||||
Total expenses | 197,890 | 8,001 | 205,891 | 68,877 | 70,840 | 139,717 | 44,260 | 389,868 | ||||||||||||||||||||
Income (loss) from operations | $ | 90,908 | $ | (1,785 | ) | $ | 89,123 | $ | 46,902 | $ | 33,682 | $ | 80,584 | $ | (42,873 | ) | $ | 126,834 | ||||||||||
Retail Services | E-Commerce | |||||||||||||||||||||||||||
Domestic | Foreign | Total | Domestic | Foreign | Total | Corporate | Consolidated | |||||||||||||||||||||
Six Months Ended June 30, 2012 | ||||||||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||||
Pawn loan fees and service charges | $ | 137,598 | $ | 7,352 | $ | 144,950 | $ | - | $ | - | $ | - | $ | - | $ | 144,950 | ||||||||||||
Proceeds from disposition of merchandise | 340,470 | 23,869 | 364,339 | - | - | - | - | 364,339 | ||||||||||||||||||||
Consumer loan fees | 57,951 | - | 57,951 | 142,926 | 152,685 | 295,611 | - | 353,562 | ||||||||||||||||||||
Other | 5,147 | 260 | 5,407 | 453 | 5 | 458 | 416 | 6,281 | ||||||||||||||||||||
Total revenue | 541,166 | 31,481 | 572,647 | 143,379 | 152,690 | 296,069 | 416 | 869,132 | ||||||||||||||||||||
Cost of revenue | ||||||||||||||||||||||||||||
Disposed merchandise | 222,473 | 21,487 | 243,960 | - | - | - | - | 243,960 | ||||||||||||||||||||
Consumer loan loss provision | 11,069 | - | 11,069 | 52,597 | 71,114 | 123,711 | - | 134,780 | ||||||||||||||||||||
Total cost of revenue | 233,542 | 21,487 | 255,029 | 52,597 | 71,114 | 123,711 | - | 378,740 | ||||||||||||||||||||
Net revenue | 307,624 | 9,994 | 317,618 | 90,782 | 81,576 | 172,358 | 416 | 490,392 | ||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||||
Operations and administration | 179,463 | 16,016 | 195,479 | 49,589 | 54,501 | 104,090 | 34,776 | 334,345 | ||||||||||||||||||||
Depreciation and amortization | 14,646 | 2,249 | 16,895 | 5,339 | 563 | 5,902 | 7,011 | 29,808 | ||||||||||||||||||||
Total expenses | 194,109 | 18,265 | 212,374 | 54,928 | 55,064 | 109,992 | 41,787 | 364,153 | ||||||||||||||||||||
Income (loss) from operations | $ | 113,515 | $ | (8,271 | ) | $ | 105,244 | $ | 35,854 | $ | 26,512 | $ | 62,366 | $ | (41,371 | ) | $ | 126,239 | ||||||||||
Corporate operations primarily include corporate expenses, such as legal, occupancy, and other costs related to corporate service functions, such as executive oversight, insurance and risk management, public and government relations, internal audit, treasury, payroll, compliance and licensing, finance, accounting, tax and information systems (except for online lending systems, which are included in the e-commerce segment). Corporate income includes miscellaneous income not directly attributable to the Company’s segments. Corporate assets primarily include corporate property and equipment, nonqualified savings plan assets, marketable securities, foreign exchange forward contracts and prepaid insurance.
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
LOCATION INFORMATION
Retail Services Segment
The following table sets forth the number of domestic and foreign Company-owned and franchised locations in the Company’s retail services segment offering pawn lending, consumer lending, and other ancillary services as of June 30, 2013 and 2012. The Company’s domestic retail services locations operate under the names “Cash America Pawn,” “SuperPawn,” “Cash America Payday Advance,” “Cashland” and “Mr. Payroll.” In addition, certain domestic retail services locations acquired in late 2012 operate under various names that are expected to be changed to “Cash America Pawn” during 2013. The Company’s foreign retail services locations operate under the name “Cash America casa de empeño.”
As of June 30, | |||||||||||||||||||
2013 | 2012 | ||||||||||||||||||
Domestic(a) | Foreign | Total | Domestic(a)(b) | Foreign | Total | ||||||||||||||
Retail services locations offering: | |||||||||||||||||||
Both pawn and consumer lending | 581 | - | 581 | 577 | - | 577 | |||||||||||||
Pawn lending only | 169 | 47 | 216 | 130 | 195 | 325 | |||||||||||||
Consumer lending only | 77 | - | 77 | 83 | - | 83 | |||||||||||||
Other (c) | 90 | - | 90 | 101 | - | 101 | |||||||||||||
Total retail services | 917 | 47 | 964 | 891 | 195 | 1,086 |
(a) | Except as described in (c) below, includes locations operating in 22 and 23 states in the United States as of June 30, 2013 and 2012, respectively. |
(b) | Includes one unconsolidated franchised location operating under the name “Cash America Pawn” as of June 30, 2012. |
(c) | As of June 30, 2013 and 2012, includes 90 and 95 unconsolidated franchised check cashing locations, respectively, and as of June 30, 2012, includes six consolidated Company-owned check cashing locations. As of June 30, 2013 and 2012, includes locations operating in 14 and 16 states in the United States, respectively. |
E-Commerce Segment
As of June 30, 2013 and 2012, the Company’s e-commerce segment operated in 32 states in the United States and in three foreign countries:
- in the United States at http://www.cashnetusa.com and http://www.netcredit.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.
During 2013, the e-commerce segment also offered a line of credit product in Mexico under the trade name “Debit Plus.” The Company stopped offering this line of credit product in Mexico during the second quarter of 2013. The results of operations associated with this product are not material to the e-commerce segment or to the Company.
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NON-GAAP DISCLOSURE
ADJUSTED EARNINGS AND ADJUSTED EARNINGS PER SHARE
Adjusted Earnings and 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 a reconciliation for the three and six months ended June 30, 2013 and 2012 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, which are shown net of tax (dollars in thousands, except per share data):
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||
$ | Per | $ | Per | $ | Per | $ | Per | |||||||||||||||||||
Net income and diluted earnings per share attributable to Cash America International, Inc. | $ | 25,132 | $ | 0.81 | $ | 29,820 | $ | 0.94 | $ | 69,058 | $ | 2.23 | $ | 71,287 | $ | 2.24 | ||||||||||
Adjustments (net of tax): | ||||||||||||||||||||||||||
Intangible asset amortization | 828 | 0.03 | 664 | 0.02 | 1,661 | 0.05 | 1,403 | 0.04 | ||||||||||||||||||
Non-cash equity-based compensation | 770 | 0.03 | 942 | 0.03 | 1,758 | 0.05 | 1,915 | 0.06 | ||||||||||||||||||
Convertible debt non-cash interest and issuance cost amortization | 637 | 0.02 | 583 | 0.02 | 1,263 | 0.04 | 1,166 | 0.04 | ||||||||||||||||||
Foreign currency transaction loss (gain) | (41) | - | 156 | - | 197 | 0.01 | 103 | - | ||||||||||||||||||
Adjusted earnings and adjusted earnings per share | $ | 27,326 | $ | 0.89 | $ | 32,165 | $ | 1.01 | $ | 73,937 | $ | 2.38 | $ | 75,874 | $ | 2.38 | ||||||||||
(a) | Diluted shares are calculated by giving effect to the potential dilution that could occur if securities or other contracts to issue common shares were exercised and converted into common shares during the period. | |||||||||||||||||||||||||
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NON-GAAP DISCLOSURE
ADJUSTED EBITDA
Adjusted EBITDA
The table below shows adjusted EBITDA, a non-GAAP measure that the Company defines as earnings excluding depreciation, amortization, interest, foreign currency transaction gains or losses, equity in earnings or loss of unconsolidated subsidiary and provision for income taxes and including the net income or loss attributable to noncontrolling interests. 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. Adjusted EBITDA is also useful to investors to help assess the Company’s liquidity and estimated enterprise value. In addition, management believes that the adjustments shown below, especially the adjustments for charges related to events that occurred during the third and fourth quarters of 2012, such as the withdrawn proposed initial public offering of the Company’s wholly-owned subsidiary, Enova International, Inc. (the “Enova IPO”), the reorganization of the Company's Mexico-based pawn operations (the “Mexico Reorganization”), and the voluntary reimbursements to Ohio customers (the “Ohio Reimbursements”) are useful to investors in order to allow them to compare the Company’s financial results for the current and prior year trailing 12 months. 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, | ||||||||||||
2013 | 2012 | |||||||||||
Net income attributable to Cash America International, Inc. | $ | 105,241 | $ | 143,891 | ||||||||
Adjustments: | ||||||||||||
Charges related to withdrawn proposed Enova IPO(a) | 3,112 | 767 | ||||||||||
Charges related to Mexico Reorganization(b) | 28,873 | - | ||||||||||
Charges related to Ohio Reimbursements(c) | 13,400 | - | ||||||||||
Depreciation and amortization expenses | 68,587 | (d) | 59,207 | |||||||||
Interest expense, net | 31,455 | 27,859 | ||||||||||
Foreign currency transaction loss | 460 | 1,149 | ||||||||||
Equity in loss of unconsolidated subsidiary | 283 | 216 | ||||||||||
Provision for income taxes | 75,864 | (e) | 86,428 | |||||||||
Net loss attributable to the noncontrolling interest | (3,954 | ) | (f) | (2,014 | ) | |||||||
Adjusted EBITDA | $ | 323,321 | $ | 317,503 | ||||||||
Adjusted EBITDA margin calculated as follows: | ||||||||||||
Total revenue | $ | 1,810,377 | $ | 1,741,393 | ||||||||
Adjusted EBITDA | $ | 323,321 | $ | 317,503 | ||||||||
Adjusted EBITDA as a percentage of total revenue | 17.9 | % | 18.2 | % |
(a) | Represents charges directly related to the proposed Enova IPO that was withdrawn in July 2012, before tax benefit of $1.1 million and $0.3 million for the trailing twelve months ended June 30, 2013 and 2012, respectively. | |
(b) | Represents charges related to the Mexico Reorganization, before tax benefit of $1.2 million and noncontrolling interest of $2.3 million. Includes $12.6 million and $7.2 million of depreciation and amortization expenses and charges for the recognition of a deferred tax asset valuation allowance, respectively, as noted in (d) and (e) below. | |
(c) | Represents charges related to the Ohio Reimbursements, before tax benefit of $5.0 million. | |
(d) | Excludes $12.6 million of depreciation and amortization expenses, which are included in “Charges related to the Mexico Reorganization” in the table above. | |
(e) | Excludes a $7.2 million charge for the recognition of a deferred tax asset valuation allowance, which is included in “Charges related to the Mexico Reorganization” in the table above. Includes an income tax benefit related to the Mexico Reorganization of $1.2 million. | |
(f) | Includes $2.3 million of noncontrolling interests related to the Mexico Reorganization. | |
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 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 its GAAP results, provide a more complete understanding of factors and trends affecting its 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 or superior to, its 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