Exhibit 99.1
Cash America Reports Third Quarter
Net Earnings up 35% and Declares Dividend
FORT WORTH, Texas--(BUSINESS WIRE)--Oct. 26, 2006--Cash America
International, Inc. (NYSE:CSH) announced today that net income for the third
quarter ended September 30, 2006 increased 35% to $12,941,000 (42 cents per
share) compared to $9,563,000 (32 cents per share) for the same period in 2005.
Earnings per share exceeded the Company's published expectations for the quarter
of between 38 cents and 41 cents. The third quarter 2006 results represent the
twentieth consecutive quarter that Cash America has reported an increase in net
income above 20%.
The increase in earnings was led by a 14% increase in total revenue during
the period, up from $144.8 million in the third quarter of 2005 to $165.6
million during the third quarter of 2006. Total revenue improvements included a
20% increase in cash advance fees, which rose from $40.4 million in the third
quarter of 2005 to $48.4 million during the same period in 2006. A larger
component to the increase in total revenue came from continued strong demand for
the Company's pawn related activities. Revenue from finance and service charges
on pawn loans combined with merchandise sales was up 12% from a total of $102.0
million during the third quarter of 2005 to $114.3 million in the third quarter
of 2006. Consolidated net revenue, defined as total revenue reduced for the cost
of merchandise sold during the period, rose 15% on the strength of slightly
higher gross profit margins. Consolidated same store net revenue was up 7.2% in
the third quarter of 2006 compared to the prior year period.
Commenting on the results of the quarter, Daniel R. Feehan, President and
Chief Executive Officer of Cash America said, "The higher levels of both pawn
loans and short-term cash advances has led to another strong quarter due to top
line revenue growth. Our pawn loan balances finished the quarter up 9% over the
same period last year and the active balance of short-term cash advances,
customer obligations which have not reached their due date, was up 51% from last
year's third quarter, partially aided by the inclusion of CashNetUSA which was
acquired on September 15, 2006. The characteristics of our loans and merchandise
available for sale provide the Company with positive momentum for the fourth
quarter of 2006."
For the first nine months of fiscal year 2006, Cash America produced an
increase in net income of 38% to $39,242,000 ($1.29 per share) compared to
$28,365,000 (94 cents per share) in the same period of the prior year. The 2006
year-to-date net income includes a $1.4 million (5 cents per share) after-tax
gain on proceeds from a lease contract termination during the second quarter.
Excluding this gain, net income for the first nine months of 2006 is $37,833,000
($1.24 per share), up 33% compared to the same period in 2005. Driving the
year-over-year net income increase was an increase of 13% in total revenue to
$477.8 million for the nine-month period ended September 2006 up from $423.3
million for the same period in 2005.
Cash America will host a conference call to discuss the third quarter
results on Thursday, October 26th at 3:45 p.m. CDT. A live web cast of the call
will be available on the Investor Relations section of the Company's corporate
web site (www.cashamerica.com). To listen to the live call, please go to the web
site at least fifteen minutes early to register, download, and install any
necessary audio software. A replay will be available on the Company's web site
for 90 days following the conference call.
Additionally, the Company announced that the Board of Directors, at its
regularly scheduled quarterly meeting, declared a $0.025 (2.5 cents) per share
cash dividend on common stock outstanding. The dividend will be paid to
shareholders of record on November 8, 2006 and will be paid at the close of
business on November 22, 2006.
Outlook for the Fourth Quarter of 2006 and Fiscal Year 2007
Management believes that continued growth in earnings will be largely a
function of sustained increases in demand for its loan products, which generally
lead to higher asset balances and revenue. Other elements expected to affect the
growth in revenue include the ongoing maturation of the 136 additional lending
locations opened or acquired during the last 24 months, the regulatory
governance of consumer loan products and the integration of CashNetUSA. As it
enters the fourth quarter of 2006, management anticipates that demand for the
Company's products will remain strong and is confirming its previously reported
top-end expectation for full year 2006 earnings per share of $1.98 and narrowing
the bottom-end to $1.92, compared to $1.48 per share from continuing operations
in fiscal 2005. This range implies a fourth quarter 2006 range of between 68
cents and 74 cents per share, compared to 55 cents per share in the fourth
quarter of 2005. The 2006 full year estimates do not include the $1.4 million
after tax gain (5 cents per share) related to the early termination of a store
lease reported in the second quarter. In addition, Cash America is confirming
its recently released expectations for fiscal year 2007 consolidated earnings
per share of between $2.40 and $2.55, which was reported on September 18, 2006.
Cash America International, Inc. is a provider of specialty financial
services to individuals in the United States with 905 total locations. Cash
America is the largest provider of secured non-recourse loans to individuals,
commonly referred to as pawn loans, through 474 locations in 23 states under the
brand names Cash America Pawn and SuperPawn. The Company also offers short-term
cash advances in many of its locations including 293 locations that offer this
service under the brand names Cash America Payday Advance and Cashland.
Short-term cash advances are also offered to customers via the Internet
distribution channel of CashNetUSA located at http://www.cashnetusa.com. In
addition, check cashing services are provided through its 138 franchised and
Company-owned "Mr. Payroll" check cashing centers. For additional information,
visit the Company's websites located at http://www.cashamerica.com and
http://www.cashnetusa.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995
This release contains forward-looking statements about the business,
financial condition and prospects of Cash America International, Inc. and its
subsidiaries ("the Company"). The actual results of the Company could differ
materially from those indicated by the forward-looking statements because of
various risks and uncertainties including, without limitation, changes in demand
for the Company's services, the actions of third parties who offer products and
services at the Company's locations, changes in competition, the ability of the
Company to open new operating units in accordance with its plans, economic
conditions, real estate market fluctuations, interest rate fluctuations, changes
in the capital markets, changes in tax and other laws and governmental rules and
regulations applicable to the Company's business, the ability to successfully
integrate newly acquired businesses into the Company's operations and other
risks indicated in the Company's filings with the Securities and Exchange
Commission. These risks and uncertainties are beyond the ability of the Company
to control, nor can the Company predict, in many cases, all of the risks and
uncertainties that could cause its actual results to differ materially from
those indicated by the forward-looking statements. When used in this release,
terms such as "believes," "estimates," "plans," "expects," "anticipates" and
similar expressions as they relate to the Company or its management are intended
to identify forward-looking statements. The Company disclaims any intention or
obligation to update or revise any forward-looking statements to reflect events
or circumstances occurring after the date of this release.
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
HIGHLIGHTS OF CONSOLIDATED RESULTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2006 2005 2006 2005
--------- --------- --------- ---------
Consolidated Operations:
Total revenue $165,596 $144,773 $477,821 $423,331
Net revenue $119,315 $103,910 $335,912 $295,574
Total expenses $95,971 $86,356 $269,186 $243,212
Income from operations $23,344 $17,554 $66,726 $52,362
Net Income $12,941 $9,563 $39,242 $28,365
Earnings per share:
Basic $0.44 $0.33 $1.32 $0.97
Diluted $0.42 $0.32 $1.29 $0.94
Weighted average shares:
Basic 29,707 29,309 29,652 29,329
Diluted 30,548 30,142 30,515 30,218
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
September 30, December 31,
-------------------
2006 2005 2005
--------- --------- ------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $30,241 $19,492 $18,852
Pawn loans 133,734 122,916 115,280
Cash advances, net 70,253 39,712 40,704
Merchandise held for disposition,
net 83,179 73,827 72,683
Finance and service charges
receivable 23,846 21,305 22,048
Other receivables and prepaid
expenses 11,539 11,923 13,406
Deferred tax assets 14,657 13,364 11,274
--------- --------- ------------
Total current assets 367,449 302,539 294,247
Property and equipment, net 110,983 93,184 94,856
Goodwill 193,379 173,313 174,987
Intangible assets, net 27,078 24,119 23,391
Other assets 12,296 10,816 11,167
--------- --------- ------------
Total assets $711,185 $603,971 $598,648
========= ========= ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued
expenses $52,045 $32,401 $37,217
Customer deposits 7,470 6,579 6,239
Income taxes currently payable 2,456 885 1,449
Current portion of long-term debt 16,786 16,786 16,786
--------- --------- ------------
Total current liabilities 78,757 56,651 61,691
Deferred tax liabilities 11,688 10,757 11,344
Other liabilities 1,578 1,445 1,689
Long-term debt 200,617 177,219 149,208
--------- --------- ------------
Total liabilities 292,640 246,072 223,932
--------- --------- ------------
Stockholders' equity:
Common stock, 30,235,164 shares
issued 3,024 3,024 3,024
Additional paid-in capital 160,234 156,022 156,557
Retained earnings 267,004 214,052 229,975
Accumulated other comprehensive
income (loss) 21 -- (5)
Notes receivable secured by
common stock (382) (2,488) (2,488)
Treasury shares (11,356) (12,711) (12,347)
--------- --------- ------------
Total stockholders' equity 418,545 357,899 374,716
--------- --------- ------------
Total liabilities and
stockholders' equity $711,185 $603,971 $598,648
========= ========= ============
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -------------------
2006 2005 2006 2005
--------- -------- --------- ---------
(Unaudited)
Revenue
Finance and service charges $39,404 $35,980 $109,047 $102,476
Proceeds from disposition of
merchandise 74,848 66,027 235,239 210,101
Cash advance fees 48,401 40,428 123,235 102,114
Check cashing fees, royalties
and other 2,943 2,338 10,300 8,640
--------- -------- --------- ---------
Total Revenue 165,596 144,773 477,821 423,331
Cost of Revenue
Disposed merchandise 46,281 40,863 141,909 127,757
--------- -------- --------- ---------
Net Revenue 119,315 103,910 335,912 295,574
--------- -------- --------- ---------
Expenses
Operations 58,263 54,596 177,178 162,296
Cash advance loss provision 17,503 15,502 32,738 31,905
Administration 13,259 10,411 39,468 31,924
Depreciation and amortization 6,946 5,847 19,802 17,087
--------- -------- --------- ---------
Total Expenses 95,971 86,356 269,186 243,212
--------- -------- --------- ---------
Income from Operations 23,344 17,554 66,726 52,362
Interest expense (3,162) (2,787) (8,010) (7,614)
Interest income 435 402 1,202 1,227
Foreign currency transaction
gain (loss) 67 47 245 (868)
Gain from termination of
contract -- -- 2,167 --
--------- -------- --------- ---------
Income from Operations before
Income Taxes 20,684 15,216 62,330 45,107
Provision for income taxes 7,743 5,653 23,088 16,742
--------- -------- --------- ---------
Net Income $12,941 $9,563 $39,242 $28,365
========= ======== ========= =========
Earnings Per Share:
Basic $0.44 $0.33 $1.32 $0.97
Diluted $0.42 $0.32 $1.29 $0.94
Weighted average common shares
outstanding:
Basic 29,707 29,309 29,652 29,329
Diluted 30,548 30,142 30,515 30,218
Dividends declared per common
share $0.025 $0.025 $0.075 $0.075
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
FINANCIAL AND OPERATING DATA
($ in thousands unless noted otherwise)
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------- ---------------------
2006 2005 2006 2005
----------- --------- ---------- ----------
PAWN LENDING OPERATIONS:
Pawn loans
Annualized yield on pawn
loans 119.3 % 118.7 % 123.3 % 124.5 %
Total amount of pawn
loans written and
renewed $129,269 $118,353 $357,170 $330,531
Average pawn loan balance
outstanding $131,089 $120,230 $118,297 $110,070
Average pawn loan balance
per average location in
operation $284 $268 $258 $248
Ending pawn loan balance
per location in
operation $289 $271 $289 $271
Average pawn loan amount
at end of period (not in
thousands) $100 $92 $100 $92
Profit margin on
disposition of
merchandise as a
percentage of proceeds
from disposition of
merchandise 38.2 % 38.1 % 39.7 % 39.2 %
Average annualized
merchandise turnover 2.4x 2.4x 2.6x 2.6x
Average balance of
merchandise held for
disposition per average
location in operation $167 $153 $157 $146
Ending balance of
merchandise held for
disposition per location
in operation $180 $163 $180 $163
Pawnshop locations in
operation -
Beginning of period,
owned 457 445 456 441
Acquired 5 4 7 6
Start-ups 1 4 2 7
Combined or closed -- -- (2) (1)
----------- --------- ---------- ----------
End of period, owned 463 453 463 453
Franchise locations at
end of period 11 11 11 11
----------- --------- ---------- ----------
Total pawnshop locations
at end of period 474 464 474 464
=========== ========= ========== ==========
Average number of owned
pawnshop locations 462 448 459 444
=========== ========= ========== ==========
Cash advances
Total amount of cash
advances written (a) $76,040 $76,543 $200,786 $201,474
Number of cash advances
written (not in
thousands) (a) 190,692 218,594 510,196 598,514
Average amount per cash
advance (not in
thousands) (a) $399 $350 $394 $337
Combined cash advances
outstanding (a) $19,253 $20,217 $19,253 $20,217
Cash advances outstanding
per location at end of
period (a) $46 $47 $46 $47
Cash advances outstanding
before allowance for
losses (b) $8,780 $11,024 $8,780 $11,024
Locations offering cash
advances at end of
period 421 434 421 434
=========== ========= ========== ==========
Average number of
locations offering cash
advances 420 431 427 429
=========== ========= ========== ==========
CASH ADVANCE OPERATIONS:
Total amount of cash
advances written (a) $219,267 $189,127 $551,189 $467,362
Number of cash advances
written (not in
thousands) (a) 589,138 504,999 1,480,025 1,290,460
Average amount per cash
advance (not in
thousands) (a) $372 $375 $372 $362
Combined cash advances
outstanding (a) $78,479 $44,148 $78,479 $44,148
Cash advances outstanding
before allowance for
losses (b) $72,562 $38,690 $72,562 $38,690
Cash advance locations in
operation -
Beginning of period 291 271 286 253
Acquired -- -- -- 1
Start-ups 2 8 10 27
Combined or closed -- -- (3) (2)
----------- --------- ---------- ----------
End of period 293 279 293 279
=========== ========= ========== ==========
Average number of cash
advance locations 292 275 289 267
=========== ========= ========== ==========
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
FINANCIAL AND OPERATING DATA (Continued)
($ in thousands unless noted otherwise)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2006 2005 2006 2005
--------- --------- --------- ---------
CHECK CASHING OPERATIONS (Mr.
Payroll Corp)(c)
Face amount of checks cashed $311,562 $294,868 $998,154 $909,491
Gross fees collected $4,264 $3,950 $14,216 $12,720
Fees as a percentage of
checks cashed 1.4 % 1.3 % 1.4 % 1.4 %
Average check cashed (not in
thousands) $401 $375 $425 $387
Centers in operation at end
of period 138 137 138 137
========= ========= ========= =========
Average number of check
cashing centers 138 136 139 135
========= ========= ========= =========
(a) Includes cash advances made by the Company and cash advances made
by third-party lenders offered at the Company's locations.
(b) Amounts recorded in the Company's consolidated financial
statements.
(c) Includes franchised and company-owned locations.
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED CASH ADVANCES OUTSTANDING AND RELATED ALLOWANCE FOR
LOSSES
(in thousands)
September 30,
-----------------
2006 2005
-------- --------
Originated by the Company
Active cash advances and fees receivable $54,741 $31,372
Cash advances and fees in collection 20,146 10,680
-------- --------
Total originated by the Company 74,887 42,052
-------- --------
Originated by third-party lenders
Active cash advances and fees receivable 17,072 16,116
Cash advances and fees in collection 5,773 6,197
-------- --------
Total originated by third-party lenders 22,845 22,313
-------- --------
Combined gross portfolio 97,732 64,365
Less: Elimination of cash advances owned by third-
party lenders 16,390 14,177
Less: Discount on cash advances assigned by third-
party lenders -- 474
-------- --------
Company-owned cash advances and fees receivable,
gross 81,342 49,714
Less: Allowance for losses 11,089 10,002
-------- --------
Cash advances and fees receivable, net $70,253 $39,712
======== ========
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -----------------
2006 2005 2006 2005
---------- -------- -------- --------
Allowance for company-owned cash
advances
Balance at beginning of period $7,541 $7,720 $6,309 $4,358
Cash advance loss provision 17,641 15,282 32,859 31,420
Charge-offs (16,266) (14,990) (35,924) (32,691)
Recoveries 2,173 1,990 7,845 6,915
---------- -------- -------- --------
Balance at end of period $11,089 $10,002 $11,089 $10,002
========== ======== ======== ========
Accrual for third-party lender-
owned cash advances
Balance at beginning of period $891 $607 $874 $342
(Decrease) increase in loss
provision (138) 220 (121) 485
---------- -------- -------- --------
Balance at end of period $753 $827 $753 $827
========== ======== ======== ========
Combined statistics
Combined cash advance loss
provision $17,503 $15,502 $32,738 $31,905
========== ======== ======== ========
Combined cash advance loss
provision as a % of combined
cash advances written 5.9 % 5.8 % 4.4 % 4.8 %
========== ======== ======== ========
Charge-offs (net of recoveries)
as a % of combined cash
advances written 4.8 % 4.9 % 3.7 % 3.9 %
========== ======== ======== ========
Combined allowance for losses
and accrued third-party
lenders losses as a % of
combined gross portfolio 12.1 % 16.8 % 12.1 % 16.8 %
========== ======== ======== ========
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
INCOME FROM OPERATIONS BY OPERATING SEGMENT
THREE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005
(in thousands)
Pawn Cash Check
Lending Advance Cashing Consolidated
--------- --------- ------- ------------
Three Months Ended September
30, 2006:
- -----------------------------
Revenue
Finance and service charges $39,404 $-- $-- $39,404
Proceeds from disposition
of merchandise 74,848 -- -- 74,848
Cash advance fees 11,963 36,438 -- 48,401
Check cashing fees,
royalties and other -- 1,887 1,056 2,943
--------- --------- ------- ------------
Total revenue 126,215 38,325 1,056 165,596
Cost of revenue - disposed
merchandise 46,281 -- -- 46,281
--------- --------- ------- ------------
Net revenue 79,934 38,325 1,056 119,315
--------- --------- ------- ------------
Expenses
Operations 43,148 14,788 327 58,263
Cash advance loss provision 5,934 11,569 -- 17,503
Administration 7,843 5,118 298 13,259
Depreciation and
amortization 4,748 2,107 91 6,946
--------- --------- ------- ------------
Total expenses 61,673 33,582 716 95,971
--------- --------- ------- ------------
Income from operations $18,261 $4,743 $340 $23,344
========= ========= ======= ============
As of September 30, 2006:
- -----------------------------
Total assets $529,258 $174,621 $7,306 $711,185
========= ========= ======= ============
Three Months Ended September
30, 2005:
- -----------------------------
Revenue
Finance and service charges $35,980 $-- $-- $35,980
Proceeds from disposition
of merchandise 66,027 -- -- 66,027
Cash advance fees 11,341 29,087 -- 40,428
Check cashing fees,
royalties and other -- 1,393 945 2,338
--------- --------- ------- ------------
Total revenue 113,348 30,480 945 144,773
Cost of revenue - disposed
merchandise 40,863 -- -- 40,863
--------- --------- ------- ------------
Net revenue 72,485 30,480 945 103,910
--------- --------- ------- ------------
Expenses
Operations 41,130 13,123 343 54,596
Cash advance loss provision 5,201 10,301 -- 15,502
Administration 6,116 4,017 278 10,411
Depreciation and
amortization 3,957 1,811 79 5,847
--------- --------- ------- ------------
Total expenses 56,404 29,252 700 86,356
--------- --------- ------- ------------
Income from operations $16,081 $1,228 $245 $17,554
========= ========= ======= ============
As of September 30, 2005:
- -----------------------------
Total assets $482,134 $114,835 $7,002 $603,971
========= ========= ======= ============
Note: To more accurately estimate the administrative expenses
associated with each operating segment, the Company began in the
second quarter of 2006 to allocate the aggregate administrative
expenses on a different basis. Management believes that the current
methodology creates a more balanced allocation among the segments
based on the time, resources and activities associated with the
administrative activities of each operating segment. All prior
periods have been revised to reflect this change in the allocation of
administrative burden. There is no change to the consolidated
performance of the Company for any period. There are no other changes
to the segment results other than to the administrative expense
allocation.
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
INCOME FROM OPERATIONS BY OPERATING SEGMENT
NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005
(in thousands)
Nine Months Ended September 30,
2006:
- ----------------------------------
Revenue
Finance and service charges $109,047 $-- $-- $109,047
Proceeds from disposition of
merchandise 235,239 -- -- 235,239
Cash advance fees 31,893 91,342 -- 123,235
Check cashing fees, royalties
and other -- 7,220 3,080 10,300
--------- -------- ------ ---------
Total revenue 376,179 98,562 3,080 477,821
Cost of revenue - disposed
merchandise 141,909 -- -- 141,909
--------- -------- ------ ---------
Net revenue 234,270 98,562 3,080 335,912
--------- -------- ------ ---------
Expenses
Operations 132,164 44,033 981 177,178
Cash advance loss provision 11,541 21,197 -- 32,738
Administration 23,417 14,872 1,179 39,468
Depreciation and amortization 13,568 5,973 261 19,802
--------- -------- ------ ---------
Total expenses 180,690 86,075 2,421 269,186
--------- -------- ------ ---------
Income from operations $53,580 $12,487 $659 $66,726
========= ======== ====== =========
Nine Months Ended September 30,
2005:
- ----------------------------------
Revenue
Finance and service charges $102,476 $-- $-- $102,476
Proceeds from disposition of
merchandise 210,101 -- -- 210,101
Cash advance fees 30,371 71,743 -- 102,114
Check cashing fees, royalties
and other -- 5,721 2,919 8,640
--------- -------- ------ ---------
Total revenue 342,948 77,464 2,919 423,331
Cost of revenue - disposed
merchandise 127,757 -- -- 127,757
--------- -------- ------ ---------
Net revenue 215,191 77,464 2,919 295,574
--------- -------- ------ ---------
Expenses
Operations 123,046 38,199 1,051 162,296
Cash advance loss provision 11,469 20,436 -- 31,905
Administration 19,032 12,041 851 31,924
Depreciation and amortization 11,566 5,279 242 17,087
--------- -------- ------ ---------
Total expenses 165,113 75,955 2,144 243,212
--------- -------- ------ ---------
Income from operations $50,078 $1,509 $775 $52,362
========= ======== ====== =========
See Note above regarding the revised methodology of allocating the
aggregate administrative expenses to the operating segments.
CONTACT: Cash America International, Inc., Fort Worth
Thomas A. Bessant, Jr., 817-335-1100