Exhibit 99.1
Cash America Announces a 25% Increase in First Quarter Net Income
and Declares Dividend
FORT WORTH, Texas--(BUSINESS WIRE)--April 26, 2007--Cash America
International, Inc. (NYSE: CSH) announced today that net income for
the first quarter ended March 31, 2007 increased 25% to $19,234,000
(63 cents per share) compared to $15,388,000 (51 cents per share) for
the same period in 2006. Earnings per share for the first three months
of 2007 were at the upper end of the Company's expectations published
in January 2007 of between 60 and 64 cents per share. The increase in
earnings was largely due to a significant increase in revenue from
cash advance loans, which contributed to a 37% increase in
consolidated total revenue for the first quarter of 2007 compared to
the same period in 2006.
Total revenue reached $222.9 million for the three-month period
ended March 31, 2007. Revenue from the Company's cash advance product
more than doubled to $78.5 million, due primarily to higher levels of
assets outstanding and the addition of the Company's online cash
advance product through CashNetUSA that was acquired in the third
quarter of 2006. Revenue from the Company's other core business
activities also rose significantly as service charges and fees on pawn
loans rose 10% to $38.4 million and revenue from the sale of
merchandise increased 15% to $100.2 million in year-over-year first
quarter comparisons.
Driving the growth in cash advance fees was a 107% increase in
consolidated cash advances written by the Company and third-party
lenders during the 2007 period, compared to the first quarter of 2006.
This growth in cash advances written was enhanced by the growth of
CashNetUSA which expanded into new markets in late 2006 and early
2007. In addition, the Company's bricks and mortar lending locations
also posted increases in loan volumes. The Company's revenue from
service charges on pawn loans increased on the strength of higher pawn
loan balances outstanding during the quarter and a 6% increase in pawn
loans written during the quarter, compared to the prior year period.
Pawn loan balances outstanding finished the first quarter of 2007 up
9% from the same date in 2006. Consolidated same store net revenue was
up 8.6% for the three month period in 2007 versus the same period in
2006.
Commenting on the first quarter results, Daniel R. Feehan,
President and Chief Executive Officer of Cash America said, "The
robust growth in revenue from cash advance activities in the first
quarter of 2007 was largely the result of a significant influx of new
customers into our portfolio and a tripling of loans receivable within
the cash advance business segment, compared to the end of the first
quarter in 2006. New customers typically bring higher levels of bad
debt expense as new customers have historically represented a higher
risk loan with greater delinquency rates. During the period, we
increased our provision expense for loan losses accordingly. After
absorbing these expenses, the Company generated a 29% increase in
income from operations in the first quarter of 2007 compared to the
same period in 2006." He added, "We emerge from the quarter with a
larger platform of new customers and higher levels of income producing
assets after absorbing the customer acquisition economics."
Cash America will host a conference call to discuss the first
quarter results on Thursday, April 26th at 3:45 PM 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 $0.035 (3.5
cents) per share cash dividend on common stock outstanding. The
dividend will be paid to shareholders of record on May 9, 2007, and
will be paid at the close of business on May 23, 2007.
Outlook for the Second Quarter of 2007 and Related Fiscal Year
Management believes that the opportunities for sustained growth in
revenue and earnings will be largely associated with the customer
demand for the credit products provided by the Company, which take the
form of pawn loans and short-term cash advances. Other elements
expected to affect the growth in revenue include the ongoing
maturation of the 237 gross additional pawn and cash advance locations
opened or acquired during the last 36 months, the regulatory
governance of loan products and the development and profitable growth
of the Company's online distribution channel for cash advance
products. As it enters the second quarter of 2007, management
anticipates that demand for the Company's products will remain strong.
Based on its views and on the preceding factors management expects
that the second quarter 2007 net income per share will be between 38
and 42 cents per share compared to 31 cents per share in the second
quarter 2006, which excludes an after tax gain of 5 cents per share.
The gain in the second quarter of 2006 was from the early termination
of a store lease, representing approximately $2.2 million before
taxes.
Expectations for the remainder of fiscal 2007 will be impacted by
earning asset levels in later periods based on customer demand for
credit products. At this time, management confirms its previously
announced expectation for the full year 2007 earnings per share of
between $2.45 and $2.55 compared to $1.95 per share in fiscal 2006,
which excludes the previously discussed after-tax gain of 5 cents per
share in the second quarter 2006.
Cash America International, Inc. is a provider of specialty
financial services to individuals in the United States with 925 total
locations. Cash America is the largest provider of secured
non-recourse loans to individuals, commonly referred to as pawn loans,
through 489 locations in 22 states under the brand names Cash America
Pawn and SuperPawn. The Company also offers short-term cash advances
in many of its locations including 296 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
www.cashnetusa.com. In addition, check cashing services are provided
through its 140 franchised and Company-owned "Mr. Payroll" check
cashing centers. For additional information, visit the Company's
website located at www.cashamerica.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, fluctuations in the price of
gold, 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
March 31,
-------------------------
2007 2006
---------- ---------
Consolidated Operations:
Total revenue $222,867 $162,955
Net revenue $160,942 $110,213
Total operating expenses $126,944 $83,914
Income from operations $33,998 $26,299
Income before income taxes $30,712 $24,306
Net Income $19,234 $15,388
Earnings per share:
Basic $0.64 $0.52
Diluted $0.63 $0.51
Weighted average shares:
Basic 29,873 29,514
Diluted 30,602 30,385
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
March 31, December 31,
------------------- ------------
2007 2006 2006
--------- --------- ------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $25,728 $16,667 $25,723
Pawn loans 112,009 103,031 127,384
Cash advances, net 67,384 29,704 79,975
Merchandise held for disposition,
net 80,798 65,594 87,060
Finance and service charges
receivable 22,338 19,140 25,377
Other receivables and prepaid
expenses 19,058 15,533 16,128
Deferred tax assets 17,609 9,142 16,324
--------- --------- ---------
Total current assets 344,924 258,811 377,971
Property and equipment, net 124,752 97,173 119,261
Goodwill 238,836 175,596 238,499
Intangible assets, net 26,564 22,754 27,477
Other assets 12,810 11,234 13,036
--------- --------- ---------
Total assets $747,886 $565,568 $776,244
========= ========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued
expenses $57,169 $34,246 $91,217
Customer deposits 8,358 7,295 7,464
Income taxes currently payable 12,000 6,324 2,691
Current portion of long-term debt 16,786 16,786 16,786
--------- --------- ---------
Total current liabilities 94,313 64,651 118,158
Deferred tax liabilities 13,483 10,853 12,770
Other liabilities 1,573 1,606 1,625
Long-term debt 181,330 92,270 202,963
--------- --------- ---------
Total liabilities 290,699 169,380 335,516
--------- --------- ---------
Stockholders' equity:
Common stock, 30,235,164 shares
issued 3,024 3,024 3,024
Additional paid-in capital 161,858 157,750 161,683
Retained earnings 306,157 244,630 287,962
Accumulated other comprehensive
income 9 34 20
Notes receivable secured by common
stock (18) (382) (18)
Treasury shares, at cost (13,843) (8,868) (11,943)
--------- --------- ---------
Total stockholders' equity 457,187 396,188 440,728
--------- --------- ---------
Total liabilities and
stockholders' equity $747,886 $565,568 $776,244
========= ========= =========
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Three Months Ended
March 31,
-------------------
2007 2006
---------- --------
(Unaudited)
Revenue
Finance and service charges $38,431 $35,055
Proceeds from disposition of merchandise 100,168 87,124
Cash advance fees 78,516 35,439
Check cashing fees, royalties and other 5,752 5,337
---------- --------
Total Revenue 222,867 162,955
Cost of Revenue
Disposed merchandise 61,925 52,742
---------- --------
Net Revenue 160,942 110,213
---------- --------
Expenses
Operations 72,367 59,273
Cash advance loss provision 32,748 4,437
Administration 14,295 13,851
Depreciation and amortization 7,534 6,353
---------- --------
Total Expenses 126,944 83,914
---------- --------
Income from Operations 33,998 26,299
Interest expense (3,748) (2,436)
Interest income 418 378
Foreign currency transaction gain 44 65
---------- --------
Income before Income Taxes 30,712 24,306
Provision for income taxes 11,478 8,918
---------- --------
Net Income $19,234 $15,388
========== ========
Net Income Per Share:
Basic $0.64 $0.52
Diluted $0.63 $0.51
Weighted average common shares outstanding:
Basic 29,873 29,514
Diluted 30,602 30,385
Dividends declared per common share $0.035 $0.025
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
FINANCIAL AND OPERATING DATA
($ in thousands unless otherwise noted)
Three Months Ended
March 31,
-------------------
2007 2006
--------- ---------
PAWN LENDING OPERATIONS:
Pawn loans
Annualized yield on pawn loans 131.8 % 132.4 %
Total amount of pawn loans written and renewed $110,622 $103,927
Average pawn loan balance outstanding $118,242 $107,354
Average pawn loan balance per average location
in operation $248 $235
Ending pawn loan balance per location in
operation $235 $225
Average pawn loan amount at end of period (not
in thousands) $106 $95
Profit margin on disposition of merchandise as a
percentage of proceeds from disposition of
merchandise 38.2 % 39.5 %
Average annualized merchandise turnover 3.0x 3.1x
Average balance of merchandise held for
disposition per average location in operation $178 $153
Ending balance of merchandise held for
disposition per location in operation $169 $143
Pawnshop locations in operation -
Beginning of period, owned 475 456
Acquired 1 2
Start-ups 1 1
Combined or closed - (1)
--------- ---------
End of period, owned 477 458
Franchise locations at end of period 12 10
--------- ---------
Total pawnshop locations at end of period 489 468
========= =========
Average number of owned pawnshop locations in
operation 477 457
========= =========
Cash advances (a)
Pawn locations offering cash advances at end of
year 426 431
Average number of pawn locations offering cash
advances 425 433
Amount of cash advances written at pawn
locations:
Funded by the Company $15,486 $14,309
Funded by third-party lenders (b) (d) 44,985 44,704
--------- ---------
Aggregate amount of cash advances written at
pawn locations (b) (f) $60,471 $59,013
========= =========
Number of cash advances written at pawn
locations (not in thousands):
By the Company 50,268 43,140
By third-party lenders (b) (d) 98,126 107,987
--------- ---------
Aggregate number of cash advances written at
pawn locations (b) (f) 148,394 151,127
========= =========
Cash advance customer balances due at pawn
locations (gross):
Owned by Company (c) $6,439 $5,709
Owned by third-party lenders (b) 7,800 8,015
--------- ---------
Aggregate cash advance customer balances due
(gross) at pawn locations (b) (f) $14,239 $13,724
========= =========
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
FINANCIAL AND OPERATING DATA (Continued)
($ in thousands unless otherwise noted)
Three Months Ended
March 31,
--------------------
2007 2006
---------- ---------
CASH ADVANCE OPERATIONS (e):
Amount of cash advances written:
Funded by the Company $286,250 $121,581
Funded by third-party lenders (b) (d) 97,103 33,336
---------- ---------
Aggregate amount of cash advances written (b)
(f) $383,353 $154,917
========== =========
Number of cash advances written (not in
thousands):
By the Company 758,266 344,498
By third-party lenders (b) (d) 178,100 67,505
---------- ---------
Aggregate number of cash advances written (b)
(f) 936,366 412,003
========== =========
Cash advance customer balances due (gross):
Owned by Company (c) $84,086 $27,571
Owned by third-party lenders (b) 17,222 6,584
---------- ---------
Aggregate cash advance customer balances due
(gross) (b) (f) $101,308 $34,155
========== =========
Cash advance locations in operation (excluding
online lending) -
Beginning of period 295 286
Start-ups 2 3
Combined or closed (1) (3)
---------- ---------
End of period 296 286
========== =========
Average number of cash advance locations in
operation 295 286
========== =========
Number of states with online lending at end of
period 30 -
CONSOLIDATED CASH ADVANCE PRODUCT SUMMARY (a) (b)
(e):
Amount of cash advances written:
Funded by the Company $301,736 $135,890
Funded by third-party lenders (b) (d) 142,088 78,040
---------- ---------
Aggregate amount of cash advances written (b)
(f) $443,824 $213,930
========== =========
Number of cash advances written (not in
thousands):
By the Company 808,534 387,638
By third-party lenders (b) (d) 276,226 175,492
---------- ---------
Aggregate number of cash advances written (b)
(f) 1,084,760 563,130
========== =========
Average amount per cash advance written (not in
thousands):
Funded by the Company $373 $351
Funded by third-party lenders (b) (d) 514 445
---------- ---------
Aggregate average amount per cash advance (b)
(f) $409 $380
========== =========
Cash advance customer balances due (gross):
Owned by Company (c) $90,525 $33,280
Owned by third-party lenders (b) 25,022 14,599
---------- ---------
Aggregate cash advance customer balances due
(gross) (b) (f) $115,547 $47,879
========== =========
Total locations offering cash advances at end
of period (excluding online lending) 722 717
Average total locations offering cash advances
(excluding online lending) 720 719
Number of states with online lending at end of
period 30 -
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
FINANCIAL AND OPERATING DATA (Continued)
($ in thousands unless otherwise noted)
Three Months Ended
March 31,
-------------------
2007 2006
--------- ---------
CHECK CASHING OPERATIONS (Mr. Payroll):
Centers in operation at end of period:
Company-owned locations 5 5
Franchised locations 135 135
--------- ---------
Combined centers in operation at end of period 140 140
========= =========
Revenue from Company-owned locations $161 $182
Revenue from franchise royalties and other 979 969
--------- ---------
Total revenue (c) $1,140 $1,151
========= =========
Face amount of checks cashed:
Company-owned locations $9,610 $10,493
Franchised locations (b) 367,221 365,686
--------- ---------
Combined face amount of check cashed (b) $376,831 $376,179
========= =========
Fees collected from customers:
Company-owned locations $161 $182
Franchised locations (b) 5,446 5,490
--------- ---------
Combined fees collected from customers (b) $5,607 $5,672
========= =========
Fees as a percentage of check cashed:
Company-owned locations 1.7 % 1.7 %
Franchised locations (b) 1.5 1.5
--------- ---------
Combined fees as a percentage of check cashed
(b) 1.5 % 1.5 %
========= =========
Average check cashed (not in thousands):
Company-owned locations $428 439
Franchised locations (b) 494 477
--------- ---------
Combined average check cashed (b) $492 $476
========= =========
- -------------------------------------------------
(a) Includes cash advance activities at the Company's pawn lending
locations.
(b) Non-GAAP presentation. For informational purposes and to provide a
greater understanding of the Company's businesses. Management
believes that information provided with this level of detail is
meaningful and useful in understanding the activities and business
metrics of the Company's operations.
(c) Amounts recorded in the Company's consolidated financial
statements.
(d) Cash advances written by third-party lenders that were arranged by
the Company on behalf of the third-party lenders.
(e) Includes cash advance activities at the Company's cash advance
locations and through the Company's internet distribution channel.
(f) Includes (i) cash advances written by the Company, and (ii) cash
advances written by third-party lenders that were arranged by the
Company on behalf of the third-party lenders.
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED CASH ADVANCES OUTSTANDING
(in thousands)
March 31,
-----------------
2007 2006
-------- --------
Funded by the Company (a)
Active cash advances and fees receivable $57,077 $24,677
Cash advances and fees in collection 21,436 4,479
-------- --------
Total funded by the Company (a) 78,513 29,156
-------- --------
Funded by the third-party lenders (b) (c)
Active cash advances and fees receivable 25,024 15,440
Cash advances and fees in collection 12,010 3,283
-------- --------
Total funded by third-party lenders (b) (c) 37,034 18,723
-------- --------
Combined gross portfolio (b) (d) 115,547 47,879
Less: Elimination of cash advances owned by third-
party lenders 25,022 14,599
Less: Discount on cash advances assigned by third-
party lenders - 35
-------- --------
Company-owned cash advances and fees receivable,
gross 90,525 33,245
Less: Allowance for losses 23,141 3,541
-------- --------
Cash advances and fees receivable, net $67,384 $29,704
======== ========
Allowance for loss on Company-owned cash advances $23,141 $3,541
Accrued losses on third-party lender owned cash
advances 1,253 605
-------- --------
Combined allowance for losses and accrued third-
party lender losses $24,394 $4,146
======== ========
Allowance for Company-owned cash advances
Balance at beginning of period $19,513 $6,309
Cash advance loss provision 32,648 4,706
Charge-offs (32,511) (11,045)
Recoveries 3,491 3,571
-------- --------
Balance at end of period $23,141 $3,541
======== ========
Accrual for third-party lender-owned cash advances
Balance at beginning of period $1,153 $874
Increase (decrease) in loss provision 100 (269)
-------- --------
Balance at end of period $1,253 $605
======== ========
Combined statistics (b)
Combined cash advance loss provision $32,748 $4,437
Combined cash advance loss provision as a % of
combined cash advances written 7.4 % 2.1 %
Charge-offs (net of recoveries) as a % of combined
cash advances written 6.5 % 3.5 %
Combined allowance for losses and accrued third-
party lenders losses as a % of combined gross
portfolio 21.1 % 8.7 %
- ---------------------------------------------------
(a) Cash advances written by the Company in its pawn and cash advance
locations and through the Company's internet distribution channel.
(b) Non-GAAP presentation. For informational purposes and to provide a
greater understanding of the Company's businesses. Management
believes that information provided with this level of detail is
meaningful and useful in understanding the activities and business
metrics of the Company's operations.
(c) Cash advances written by third-party lenders that were arranged by
the Company on behalf of the third-party lenders, all at the
Company's pawn and cash advance locations and through the Company's
internet distribution channel.
(d) Includes (i) cash advances written by the Company, and (ii) cash
advances written by third-party lenders that were arranged by the
Company on behalf of the third-party lenders, all at the Company's
pawn and cash advance locations and through the Company's internet
distribution channel.
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
INCOME FROM OPERATIONS BY OPERATING SEGMENT
THREE MONTHS ENDED MARCH 31, 2007 AND 2006
(in thousands)
Pawn Cash Check
Lending Advance Cashing Consolidated
--------- --------- ------- ------------
Three Months Ended
March 31, 2007:
- -----------------------------
Revenue
Finance and service charges $38,431 $ - $ - $38,431
Proceeds from disposition
of merchandise 100,168 - - 100,168
Cash advance fees 10,120 68,396 - 78,516
Check cashing fees,
royalties and other 929 3,683 1,140 5,752
--------- --------- ------- ------------
Total revenue 149,648 72,079 1,140 222,867
Cost of revenue - disposed
merchandise 61,925 - - 61,925
--------- --------- ------- ------------
Net revenue 87,723 72,079 1,140 160,942
--------- --------- ------- ------------
Expenses
Operations 47,116 24,944 307 72,367
Cash advance loss provision 2,844 29,904 - 32,748
Administration 9,321 4,697 277 14,295
Depreciation and
amortization 5,007 2,426 101 7,534
--------- --------- ------- ------------
Total expenses 64,288 61,971 685 126,944
--------- --------- ------- ------------
Income (loss) from operations $23,435 $10,108 $455 $33,998
========= ========= ======= ============
As of March 31, 2007:
- -----------------------------
Total assets $526,088 $214,648 $7,150 $747,886
========= ========= ======= ============
Goodwill $142,052 $91,474 $5,310 $238,836
========= ========= ======= ============
Three Months Ended
March 31, 2006:
- -----------------------------
Revenue
Finance and service charges $35,055 $ - $ - $35,055
Proceeds from disposition
of merchandise 87,124 - - 87,124
Cash advance fees 9,648 25,791 - 35,439
Check cashing fees,
royalties and other 687 3,499 1,151 5,337
--------- --------- ------- ------------
Total revenue 132,514 29,290 1,151 162,955
Cost of revenue - disposed
merchandise 52,742 - - 52,742
--------- --------- ------- ------------
Net revenue 79,772 29,290 1,151 110,213
--------- --------- ------- ------------
Expenses
Operations 44,217 14,722 334 59,273
Cash advance loss provision 1,883 2,554 - 4,437
Administration 8,470 5,068 313 13,851
Depreciation and
amortization 4,342 1,930 81 6,353
--------- --------- ------- ------------
Total expenses 58,912 24,274 728 83,914
--------- --------- ------- ------------
Income from operations $20,860 $5,016 $423 $26,299
========= ========= ======= ============
As of March 31, 2006:
- -----------------------------
Total assets $453,214 $105,264 $7,090 $565,568
========= ========= ======= ============
Goodwill $125,668 $44,618 $5,310 $175,596
========= ========= ======= ============
CONTACT: Cash America International, Inc.
Thomas A. Bessant, Jr., 817-335-1100