Cash America International, Inc. (NYSE: CSH) announced today that net income for the third quarter of 2008 was $18,925,000 (63 cents per share) after incurring a variety of one time and unusual items during the quarter which lowered reported net income. The third quarter 2008 net income was reduced by $2.0 million in non-recurring costs related to the Company's contribution to support the cash advance industry's efforts in an election referendum in Ohio and a ballot initiative in Arizona plus nearly $1.0 million in lost revenue due to the interruption of normal store activities as a result of Hurricane Ike. These two events combined reduced earnings per share by approximately 9 cents in the third quarter of 2008 leading to 63 cents per share in reported earnings rather than 72 cents per share.
The Company's reported net income for the third quarter of 2008 of $18,925,000 was up 14% compared to $16,560,000 (55 cents per share) during the same period in 2007, which excludes a pre-tax gain of $6.3 million (13 cents per share after taxes) from the Company's sale of its notes receivable and related minority ownership position in an overseas pawn lending business, Svensk Pantbelåning. Including the gain in the third quarter of 2007, the Company reported net income of $20,616,000 (68 cents per share).
Total revenue increased 9% during the third quarter 2008 to $252.2 million, up from $231.5 million during the same period in 2007. Contributing to the rise in total revenue was a 14% increase in total fees and service charges from pawn loans and an increase of 15% in the proceeds from the sale of merchandise during the quarter. Consolidated income from operations rose 18% to $36.2 million on the strength of the gains in total revenue and from lower losses on cash advance loans. Loan losses as a percent of cash advance fees decreased to 42.5% in the third quarter of 2008 compared to 45.7% in the third quarter of 2007.
For the first nine months of fiscal year 2008, Cash America produced a 32% increase in net income to $64,873,000 ($2.16 per share) compared to $49,003,000 ($1.61 per share) excluding one-time gains in 2007. Total revenue increased 12% to $751.1 million for the nine-month period ended September 30, 2008 from $668.3 million for the same period in 2007 and operating income increased 33% to $116,557,000 for the same year-over-year periods.
Commenting on the results for the third quarter, Daniel R. Feehan, President and Chief Executive Officer said, "While earnings in the third quarter were reduced by non-recurring items, we are pleased with the growth in net income and the strong business metrics present in our business as we prepare for the fourth quarter. Pawn loan balances are up 16% year-over-year and merchandise levels are well suited for the next two quarters of traditionally heavy retail activity. Our online distribution platform for cash advances continues to grow at a steady rate offering capital solutions to our customers in need of short-term credit alternatives."
Cash America will conduct a conference call to discuss its third quarter earnings Thursday, October 23, 2008 at 7:45 AM CDT. A live web cast of the call will be available on the Company's corporate web site in the Investor Relations section (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.
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 November 19, 2008 to shareholders of record on November 5, 2008.
Outlook for the Fourth Quarter of 2008 and 2009 Fiscal Year
Expectations for the remainder of fiscal 2008 will be impacted by earning asset levels based on customer demand for credit products and by customer demand for the sale of merchandise in pawn locations. The fourth quarter represents an important period of retail sales for the Company, and results will be affected by consumer sentiments during the period. In addition, the Company has deemphasized cash advance lending in the states of Pennsylvania and Minnesota as a result of expected regulatory changes in the economics of cash advance products in those states in early 2009 and late 2008, respectively. Cash America will incur additional expenses associated with the Ohio and Arizona election activities in the fourth quarter of 2008 and has adjusted its fourth quarter loan products for a negative result in the Ohio election. Based on its views and expectations related to the preceding factors management expects that the fourth quarter 2008 net income per share will be between 91 and 95 cents per share compared to 88 cents per share in the fourth quarter 2007. Therefore, management's expectation for the full year 2008 earnings per share will be between $3.07 and $3.11 compared to $2.48 per share in fiscal 2007. The 2007 full year results exclude the pre-tax gain of $6.3 million (13 cents per share after taxes) in the third quarter 2007.
In addition, management is initiating its preliminary expectations for fiscal year 2009 with the perspective that certain markets for its cash advance product, specifically Pennsylvania, Minnesota, Florida and Ohio, which were all profitable in 2008 will either be unavailable, or will be available only at significantly reduced economics, in the coming year. Management believes that some of this decrease in cash advance fees will be offset by continued success in its pawn lending activities. Based on its current views of the coming year, management establishes its initial anticipated range of earnings per share of $3.35 to $3.55 for fiscal 2009. Management expects that the first two quarters of 2009 are likely to produce lower earnings per share than 2008 due to the anticipated absence of certain markets for its cash advance product and the expectation that the tax stimulus program distributions made in the second quarter of 2008 will not be repeated.
The preceding expectations of the Company's potential earnings in the fourth quarter of 2008 and fiscal year 2009 do not include the Company's announced intention to complete an acquisition of a large chain of pawn locations based in Mexico City.
Cash America International, Inc. is a provider of specialty financial services to individuals in the United States with 926 total locations. Cash America is the largest provider of secured non-recourse loans to individuals, commonly referred to as pawn loans, through 502 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 290 locations that offer this service under the brand names Cash America Payday Advance and Cashland. Short-term cash advances are also offered over the Internet to customers in 33 states in the United States and in the United Kingdom at http://www.cashnetusa.com and http://www.quickquid.co.uk, respectively. In addition, check cashing services are provided through its 134 franchised and Company-owned "Mr. Payroll" check cashing centers.
For additional information regarding the Company and the services it provides, visit the Company's websites located at:
http://www.cashamerica.com
http://www.cashlandloans.com
http://www.cashnetusa.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 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 foreign currency exchange rates, 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, | |||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||
| Consolidated Operations: | ||||||||||||
| Total revenue | $ | 252,150 | $ | 231,512 | $ | 751,063 | $ | 668,265 | ||||
| Net revenue | 184,117 | 173,819 | 544,773 | 495,863 | ||||||||
| Total operating expenses | 147,926 | 143,022 | 428,216 | 408,034 | ||||||||
|  | ||||||||||||
| Income from operations | $ | 36,191 | $ | 30,797 | $ | 116,557 | $ | 87,829 | ||||
|  | ||||||||||||
| Income before income taxes | 32,007 | 32,829 | 105,695 | 83,032 | ||||||||
|  | ||||||||||||
| Net Income | $ | 18,925 | $ | 20,616 | $ | 64,873 | $ | 53,059 | ||||
|  | ||||||||||||
| Earnings per share: | ||||||||||||
| Basic | $ | 0.65 | $ | 0.70 | $ | 2.21 | $ | 1.78 | ||||
| Diluted | $ | 0.63 | $ | 0.68 | $ | 2.16 | $ | 1.74 | ||||
|  | ||||||||||||
| Weighted average shares: | ||||||||||||
| Basic | 29,266 | 29,535 | 29,321 | 29,745 | ||||||||
| Diluted | 30,035 | 30,235 | 30,082 | 30,464 | ||||||||
|  | ||||||||||||
| CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share data) | |||||||||
|  | |||||||||
|  |  |  | |||||||
| September 30, | December 31, | ||||||||
| 2008 | 2007 | 2007 | |||||||
| (Unaudited) | |||||||||
| Assets | |||||||||
|  | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 29,754 | $ | 26,412 | $ | 22,725 | |||
| Pawn loans | 158,226 | 136,722 | 137,319 | ||||||
| Cash advances, net | 87,034 | 82,785 | 88,148 | ||||||
Merchandise held for disposition, net | 111,053 | 98,751 | 98,134 | ||||||
| Finance and service charges receivable | 29,658 | 25,528 | 26,963 | ||||||
| Income taxes recoverable | 1,306 | - | - | ||||||
| Other receivables and prepaid expenses | 13,658 | 15,349 | 16,292 | ||||||
| Deferred tax assets | 22,088 | 22,455 | 20,204 | ||||||
| Total current assets | 452,777 | 408,002 | 409,785 | ||||||
|  | |||||||||
| Property and equipment, net | 181,524 | 147,813 | 161,676 | ||||||
| Goodwill | 420,840 | 283,554 | 306,221 | ||||||
| Intangible assets, net | 21,634 | 24,569 | 23,484 | ||||||
| Other assets | 3,501 | 3,017 | 3,478 | ||||||
| Total assets | $ | 1,080,276 | $ | 866,955 | $ | 904,644 | |||
|  | |||||||||
| Liabilities and Stockholders' Equity | |||||||||
|  | |||||||||
| Current liabilities: | |||||||||
| Accounts payable and accrued expenses | $ | 66,414 | $ | 61,484 | $ | 65,399 | |||
| Accrued supplemental acquisition payment | 69,499 | 43,300 | 22,000 | ||||||
| Customer deposits | 8,754 | 8,211 | 7,856 | ||||||
| Income taxes currently payable | - | 16 | 3,755 | ||||||
| Current portion of long-term debt | 8,500 | 12,786 | 8,500 | ||||||
| Total current liabilities | 153,167 | 125,797 | 107,510 | ||||||
|  | |||||||||
| Deferred tax liabilities | 25,826 | 15,854 | 18,584 | ||||||
| Other liabilities | 2,202 | 1,621 | 1,671 | ||||||
| Long-term debt | 343,692 | 251,427 | 280,277 | ||||||
| Total liabilities | 524,887 | 394,699 | 408,042 | ||||||
|  | |||||||||
| Stockholders' equity: | |||||||||
Common stock, $.10 par value per share, 80,000,000 shares authorized, 30,235,164 shares issued | 3,024 | 3,024 | 3,024 | ||||||
| Additional paid-in capital | 163,678 | 162,837 | 163,581 | ||||||
| Retained earnings | 424,999 | 337,909 | 363,180 | ||||||
| Accumulated other comprehensive (loss) income | (59) | (4) | 16 | ||||||
Treasury shares, at cost (1,217,927 shares, 1,088,493 shares and 1,136,203 shares at September 30, 2008 and 2007, and December 31, 2007, respectively) | (36,253) | (31,510) | (33,199) | ||||||
| Total stockholders' equity | 555,389 | 472,256 | 496,602 | ||||||
| Total liabilities and stockholders' equity | $ | 1,080,276 | $ | 866,955 | $ | 904,644 | |||
|  | |||||||||
| 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, | |||||||||||
| 2008 |  | 2007 | 2008 | 2007 | ||||||||
| (Unaudited) | ||||||||||||
|  | ||||||||||||
| Revenue | ||||||||||||
| Finance and service charges | $ | 46,977 | $ | 41,386 | $ | 133,788 | $ | 117,011 | ||||
| Proceeds from disposition of merchandise | 105,517 | 91,366 | 330,189 | 277,342 | ||||||||
| Cash advance fees | 96,301 | 95,417 | 274,610 | 260,880 | ||||||||
| Check cashing fees, royalties and other | 3,355 | 3,343 | 12,476 | 13,032 | ||||||||
| Total Revenue | 252,150 | 231,512 | 751,063 | 668,265 | ||||||||
|  | ||||||||||||
| Cost of Revenue | ||||||||||||
| Disposed merchandise | 68,033 | 57,693 | 206,290 | 172,402 | ||||||||
| Net Revenue | 184,117 | 173,819 | 544,773 | 495,863 | ||||||||
|  | ||||||||||||
| Expenses | ||||||||||||
| Operations | 81,714 | 75,970 | 241,791 | 224,724 | ||||||||
| Cash advance loss provision | 40,950 | 43,612 | 102,817 | 118,688 | ||||||||
| Administration | 15,964 | 15,175 | 55,652 | 40,924 | ||||||||
| Depreciation and amortization | 9,298 | 8,265 | 27,956 | 23,698 | ||||||||
| Total Expenses | 147,926 | 143,022 | 428,216 | 408,034 | ||||||||
|  | ||||||||||||
| Income from Operations | 36,191 | 30,797 | 116,557 | 87,829 | ||||||||
| Interest expense | (4,292) | (4,378) | (11,005) | (12,119) | ||||||||
| Interest income | 113 | 145 | 220 | 999 | ||||||||
| Foreign currency transaction (loss) gain | (5) | 5 | (77) | 63 | ||||||||
| Gain on sale of foreign notes | - | 6,260 | - | 6,260 | ||||||||
| Income before Income Taxes | 32,007 | 32,829 | 105,695 | 83,032 | ||||||||
| Provision for income taxes | 13,082 | 12,213 | 40,822 | 29,973 | ||||||||
| Net Income | $ | 18,925 | $ | 20,616 | $ | 64,873 | $ | 53,059 | ||||
|  | ||||||||||||
| Earnings Per Share: | ||||||||||||
| Basic | $ | 0.65 | $ | 0.70 | $ | 2.21 | $ | 1.78 | ||||
| Diluted | $ | 0.63 | $ | 0.68 | $ | 2.16 | $ | 1.74 | ||||
| Weighted average common shares outstanding: | ||||||||||||
| Basic | 29,266 | 29,535 | 29,321 | 29,745 | ||||||||
| Diluted | 30,035 | 30,235 | 30,082 | 30,464 | ||||||||
|  | ||||||||||||
| Dividends declared per common share | $ | 0.035 | $ | 0.035 | $ | 0.105 | $ | 0.105 | ||||
|  | ||||||||||||
| CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES FINANCIAL AND OPERATING DATA ($ in thousands unless otherwise noted) | |||||||||||||
|  | |||||||||||||
|  | |||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||
| September 30, | September 30, | ||||||||||||
| 2008 | 2007 | 2008 | 2007 | ||||||||||
|  | |||||||||||||
| PAWN LENDING OPERATIONS: | |||||||||||||
| Pawn loans | |||||||||||||
| Annualized yield on pawn loans | 123.9 | % |  | 121.4 | % | 128.2 | % |  | 124.1 | % | |||
| Total amount of pawn loans written and renewed | $ | 161,225 | $ | 138,100 | $ | 442,553 | $ | 378,058 | |||||
| Average pawn loan balance outstanding | $ | 150,792 | $ | 135,205 | $ | 139,363 | $ | 126,043 | |||||
| Average pawn loan balance per average location in operation | $ | 310 | $ | 281 | $ | 287 | $ | 263 | |||||
| Ending pawn loan balance per location in operation | $ | 325 | $ | 283 | $ | 325 | $ | 283 | |||||
| Average pawn loan amount at end of period (not in thousands) | $ | 121 | $ | 109 | $ | 121 | $ | 109 | |||||
Profit margin on disposition of merchandise as a percentage of proceeds from disposition of merchandise | 35.5 | % |  | 36.9 | % | 37.5 | % |  | 37.8 | % | |||
| Average annualized merchandise turnover | 2.6 | x |  | 2.5 | x | 2.8 | x |  | 2.7 | x | |||
Average balance of merchandise held for disposition per average location in operation | $ | 213 | $ | 192 | $ | 204 | $ | 182 | |||||
Ending balance of merchandise held for disposition per location in operation | $ | 228 | $ | 204 | $ | 228 | $ | 204 | |||||
|  | |||||||||||||
| Pawnshop locations in operation - | |||||||||||||
| Beginning of period, owned | 487 | 480 | 485 | 475 | |||||||||
| Acquired | - | 2 | 1 | 5 | |||||||||
| Start-ups | - | 1 | 1 | 4 | |||||||||
| Combined or closed | - | - | - | (1) | |||||||||
| End of period, owned | 487 | 483 | 487 | 483 | |||||||||
| Franchise locations at end of period | 15 | 12 | 15 | 12 | |||||||||
| Total pawnshop locations at end of period | 502 | 495 | 502 | 495 | |||||||||
| Average number of owned pawnshop locations | 487 | 482 | 486 | 479 | |||||||||
|  | |||||||||||||
| Cash advances (b) | |||||||||||||
| Pawn locations offering cash advances at end of period | 432 | 429 | 432 | 429 | |||||||||
| Average number of pawn locations offering cash advances | 432 | 427 | 431 | 425 | |||||||||
|  | |||||||||||||
| Amount of cash advances written at pawn locations: | |||||||||||||
| Funded by the Company | $ | 15,100 | $ | 16,652 | $ | 43,229 | $ | 48,899 | |||||
| Funded by third-party lenders (a) (d) | 35,534 | 49,634 | 111,309 | 141,510 | |||||||||
| Aggregate amount of cash advances written at pawn locations (a) (f) | $ | 50,634 | $ | 66,286 | $ | 154,538 | $ | 190,409 | |||||
|  | |||||||||||||
| Number of cash advances written at pawn locations (not in thousands): | |||||||||||||
| By the Company | 46,777 | 54,821 | 137,518 | 160,253 | |||||||||
| By third-party lenders (a) (d) | 75,031 | 105,873 | 236,729 | 308,729 | |||||||||
| Aggregate number of cash advances written at pawn locations(a) (f) | 121,808 | 160,694 | 374,247 | 468,982 | |||||||||
|  | |||||||||||||
| Cash advance customer balances due at pawn locations (gross): | |||||||||||||
| Owned by Company (c) | $ | 7,096 | $ | 8,803 | $ | 7,096 | $ | 8,803 | |||||
| Owned by third-party lenders (a)(d) | 6,594 | 9,179 | 6,594 | 9,179 | |||||||||
| Aggregate cash advance customer balances due at pawn locations (gross) (a)(f) | $ | 13,690 | $ | 17,982 | $ | 13,690 | $ | 17,982 | |||||
|  | |||||||||||||
| CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES FINANCIAL AND OPERATING DATA (Continued) ($ in thousands unless otherwise noted) | ||||||||||||
|  | ||||||||||||
|  |  |  |  | |||||||||
| Three Months Ended | Nine Months Ended | |||||||||||
| September 30, | September 30, | |||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||
|  | ||||||||||||
| CASH ADVANCE OPERATIONS (e): | ||||||||||||
| Storefront operations: | ||||||||||||
| Amount of cash advances written: | ||||||||||||
| Funded by the Company | $ | 146,504 | $ | 187,302 | $ | 449,571 | $ | 522,719 | ||||
| Funded by third-party lenders (a) (d) | 21,600 | 30,212 | 71,585 | 84,884 | ||||||||
| Aggregate amount of cash advances written (a) (f) | $ | 168,104 | $ | 217,514 | $ | 521,156 | $ | 607,603 | ||||
|  | ||||||||||||
| Number of cash advances written (not in thousands): | ||||||||||||
| By the Company | 422,009 | 513,135 | 1,267,211 | 1,438,490 | ||||||||
| By third-party lenders (a) (d) | 37,867 | 55,090 | 127,651 | 159,427 | ||||||||
| Aggregate number of cash advances written (a) (f) | 459,876 | 568,225 | 1,394,862 | 1,597,917 | ||||||||
|  | ||||||||||||
| Cash advance customer balances due (gross): | ||||||||||||
| Owned by the Company (c) | $ | 40,295 | $ | 51,316 | $ | 40,295 | $ | 51,316 | ||||
| Owned by third-party lenders (a) (d) | 4,462 | 5,259 | 4,462 | 5,259 | ||||||||
| Aggregate cash advance customer balances due (gross) (a) (f) | $ | 44,757 | $ | 56,575 | $ | 44,757 | $ | 56,575 | ||||
|  | ||||||||||||
| Cash advance locations in operation (excluding online lending) - | ||||||||||||
| Beginning of period | 292 | 296 | 304 | 295 | ||||||||
| Start-ups | - | 7 | - | 10 | ||||||||
| Combined or closed | (2) | (2) | (14) | (4) | ||||||||
| End of period | 290 | 301 | 290 | 301 | ||||||||
| Average number of cash advance locations | 291 | 299 | 298 | 297 | ||||||||
|  | ||||||||||||
| Internet lending operations: | ||||||||||||
| Amount of cash advances written: | ||||||||||||
| Funded by the Company | $ | 202,706 | $ | 157,887 | $ | 551,222 | $ | 435,665 | ||||
| Funded by third-party lenders (a) (d) | 113,997 | 96,096 | 327,725 | 251,880 | ||||||||
| Aggregate amount of cash advances written (a) (f) | $ | 316,703 | $ | 253,983 | $ | 878,947 | $ | 687,545 | ||||
|  | ||||||||||||
| Number of cash advances written (not in thousands): | ||||||||||||
| By the Company | 487,572 | 400,942 | 1,318,454 | 1,117,466 | ||||||||
| By third-party lenders (a) (d) | 168,553 | 159,711 | 493,134 | 441,402 | ||||||||
| Aggregate number of cash advances written (a) (f) | 656,125 | 560,653 | 1,811,588 | 1,558,868 | ||||||||
|  | ||||||||||||
| Cash advance customer balances due (gross): | ||||||||||||
| Owned by the Company (c) | $ | 64,944 | $ | 53,591 | $ | 64,944 | $ | 53,591 | ||||
| Owned by third-party lenders (a) (d) | 19,960 | 16,631 | 19,960 | 16,631 | ||||||||
| Aggregate cash advance customer balances due (gross) (a) (f) | $ | 84,904 | $ | 70,222 | $ | 84,904 | $ | 70,222 | ||||
|  | ||||||||||||
| Number of states with online lending at end of period | 33 | 31 | 33 | 31 | ||||||||
| Number of foreign countries with online lending at end of period | 1 | 1 | 1 | 1 | ||||||||
|  | ||||||||||||
| CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES FINANCIAL AND OPERATING DATA (Continued) ($ in thousands unless otherwise noted) | ||||||||||||
|  | ||||||||||||
|  |  |  |  | |||||||||
| Three Months Ended | Nine Months Ended | |||||||||||
| September 30, | September 30, | |||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||
|  | ||||||||||||
| Combined Storefront and Internet lending operations: | ||||||||||||
| Amount of cash advances written: | ||||||||||||
| Funded by the Company | $ | 349,210 | $ | 345,189 | $ | 1,000,793 | $ | 958,384 | ||||
| Funded by third-party lenders (a) (d) | 135,597 | 126,308 | 399,310 | 336,764 | ||||||||
| Aggregate amount of cash advances written (a) (f) | $ | 484,807 | $ | 471,497 | $ | 1,400,103 | $ | 1,295,148 | ||||
|  | ||||||||||||
| Number of cash advances written (not in thousands): | ||||||||||||
| By the Company | 909,581 | 914,077 | 2,585,665 | 2,555,956 | ||||||||
| By third-party lenders (a) (d) | 206,420 | 214,801 | 620,785 | 600,829 | ||||||||
| Aggregate number of cash advances written (a) (f) | 1,116,001 | 1,128,878 | 3,206,450 | 3,156,785 | ||||||||
|  | ||||||||||||
| Cash advance customer balances due (gross): | ||||||||||||
| Owned by the Company (c) | $ | 105,239 | $ | 104,907 | $ | 105,239 | $ | 104,907 | ||||
| Owned by third-party lenders (a) (d) | 24,422 | 21,890 | 24,422 | 21,890 | ||||||||
| Aggregate cash advance customer balances due (gross) (a) (f) | $ | 129,661 | $ | 126,797 | $ | 129,661 | $ | 126,797 | ||||
|  | ||||||||||||
| CONSOLIDATED CASH ADVANCE PRODUCT SUMMARY (a) (b) (e): | ||||||||||||
| Amount of cash advances written: | ||||||||||||
| Funded by the Company | $ | 364,310 | $ | 361,841 | $ | 1,044,022 | $ | 1,007,283 | ||||
| Funded by third-party lenders (a) (d) | 171,131 | 175,942 | 510,619 | 478,274 | ||||||||
| Aggregate amount of cash advances written (a) (f) | $ | 535,441 | $ | 537,783 | $ | 1,554,641 | $ | 1,485,557 | ||||
|  | ||||||||||||
| Number of cash advances written (not in thousands): | ||||||||||||
| By the Company | 956,358 | 968,898 | 2,723,183 | 2,716,209 | ||||||||
| By third-party lenders (a) (d) | 281,451 | 320,674 | 857,514 | 909,558 | ||||||||
| Aggregate number of cash advances written (a) (f) | 1,237,809 | 1,289,572 | 3,580,697 | 3,625,767 | ||||||||
|  | ||||||||||||
| Average amount per cash advance written (not in thousands): | ||||||||||||
| By the Company | $ | 381 | $ | 373 | $ | 383 | $ | 371 | ||||
| By third-party lenders (a) (d) | 608 | 549 | 595 | 526 | ||||||||
| Aggregate average amount per cash advance (a) (f) | $ | 433 | $ | 417 | $ | 434 | $ | 410 | ||||
|  | ||||||||||||
| Cash advance customer balances due (gross): | ||||||||||||
| Owned by the Company (c) | $ | 112,335 | $ | 113,710 | $ | 112,335 | $ | 113,710 | ||||
| Owned by third-party lenders (a) (d) | 31,016 | 31,069 | 31,016 | 31,069 | ||||||||
| Aggregate cash advance customer balances due (gross) (a) (f) | $ | 143,351 | $ | 144,779 | $ | 143,351 | $ | 144,779 | ||||
|  | ||||||||||||
Total locations offering cash advances at end of period (excluding online lending) | 722 | 730 | 722 | 730 | ||||||||
| Average total locations offering cash advances (excluding online lending) | 723 | 726 | 729 | 722 | ||||||||
| Number of states with online lending at end of period | 33 | 31 | 33 | 31 | ||||||||
| Number of foreign countries with online lending at end of period | 1 | 1 | 1 | 1 | ||||||||
|  | ||||||||||||
| CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES FINANCIAL AND OPERATING DATA (Continued) ($ in thousands unless otherwise noted) | |||||||||||||
|  | |||||||||||||
|  | |||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||
| September 30, | September 30, | ||||||||||||
| 2008 | 2007 | 2008 | 2007 | ||||||||||
|  | |||||||||||||
| CHECK CASHING OPERATIONS (Mr. Payroll): | |||||||||||||
| Centers in operation at end of year (not in thousands): | |||||||||||||
| Company-owned locations | 5 | 5 | 5 | 5 | |||||||||
| Franchised locations (a) | 129 | 135 | 129 | 135 | |||||||||
| Combined centers in operations at end of year (a) | 134 | 140 | 134 | 140 | |||||||||
|  | |||||||||||||
| Revenue from Company-owned locations | $ | 89 | $ | 106 | $ | 313 | $ | 379 | |||||
| Revenue from franchise royalties and other | 689 | 713 | 2,323 | 2,438 | |||||||||
| Total revenue (c) | $ | 778 | $ | 819 | $ | 2,636 | $ | 2,817 | |||||
|  | |||||||||||||
| Face amount of checks cashed: | |||||||||||||
| Company-owned locations | $ | 7,106 | $ | 7,902 | $ | 22,322 | $ | 25,724 | |||||
| Franchised locations (a) | 295,791 | 291,255 | 968,000 | 958,277 | |||||||||
| Combined face amount of checks cashed (a) | $ | 302,897 | $ | 299,157 | $ | 990,322 | $ | 984,001 | |||||
|  | |||||||||||||
| Fees collected from customers: | |||||||||||||
| Company-owned locations | $ | 89 | $ | 106 | $ | 313 | $ | 379 | |||||
| Franchised locations (a) | 4,073 | 3,968 | 13,740 | 13,544 | |||||||||
| Combined fees collected from customers (a) | $ | 4,162 | $ | 4,074 | $ | 14,053 | $ | 13,923 | |||||
|  | |||||||||||||
| Fees as a percentage of checks cashed: | |||||||||||||
| Company-owned locations | 1.3 | % |  | 1.3 | % | 1.4 | % |  | 1.5 | % | |||
| Franchised locations (a) | 1.4 | 1.4 | 1.4 | 1.4 | |||||||||
| Combined fees as a percentage of checks cashed (a) | 1.4 | % |  | 1.4 | % | 1.4 | % |  | 1.4 | % | |||
|  | |||||||||||||
| Average check cashed (not in thousands): | |||||||||||||
| Company-owned locations | $ | 400 | $ | 375 | $ | 405 | $ | 396 | |||||
| Franchised locations (a) | 437 | 416 | 465 | 442 | |||||||||
| Combined average check cashed (a) | $ | 437 | $ | 415 | $ | 463 | $ | 441 | |||||
|  | |||||||||||||
(a) 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. |
(b) Includes cash advance activities at the Company's pawn lending locations. |
(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, all at the Company's pawn locations, cash advance locations and through the internet distribution channel. |
(e) Includes cash advance activities at the Company's cash advance storefront 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, all at the Company's pawn and cash advance locations and through the Company's internet distribution channel. |
|  |
| CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED CASH ADVANCES OUTSTANDING AND RELATED ALLOWANCE FOR LOSSES (in thousands) | ||||||||||||
|  | ||||||||||||
|  |  |  |  | |||||||||
| September 30, | ||||||||||||
| 2008 | 2007 | |||||||||||
| Funded by the Company (a) | ||||||||||||
| Active cash advances and fees receivable | $ | 73,097 | $ | 69,005 | ||||||||
| Cash advances and fees in collection | 25,857 | 28,817 | ||||||||||
| Total funded by the Company (a) | 98,954 | 97,822 | ||||||||||
|  | ||||||||||||
| Funded by third-party lenders (b)(c) | ||||||||||||
| Active cash advances and fees receivable | 31,072 | 31,069 | ||||||||||
| Cash advances and fees in collection | 13,325 | 15,888 | ||||||||||
| Total funded by third-party lenders (b)(c) | 44,397 | 46,957 | ||||||||||
| Combined gross portfolio (b) (d) | 143,351 | 144,779 | ||||||||||
| Less: Elimination of cash advances owned by third-party lenders | 31,016 | 31,069 | ||||||||||
| Company-owned cash advances and fees receivable, gross | 112,335 | 113,710 | ||||||||||
| Less: Allowance for losses | 25,301 | 30,925 | ||||||||||
| Cash advances and fees receivable, net | $ | 87,034 | $ | 82,785 | ||||||||
|  | ||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||
| September 30, | September 30, | |||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||
| Allowance for company-owned cash advances | ||||||||||||
|  | ||||||||||||
| Balance at beginning of period | $ | 27,401 | $ | 32,173 | $ | 25,676 | $ | 19,513 | ||||
| Cash advance loss provision | 41,302 | 43,604 | 102,688 | 118,011 | ||||||||
| Charge-offs | (47,762) | (48,283) | (123,443) | (117,133) | ||||||||
| Recoveries | 4,360 | 3,431 | 20,380 | 10,534 | ||||||||
| Balance at end of period | $ | 25,301 | $ | 30,925 | $ | 25,301 | $ | 30,925 | ||||
|  | ||||||||||||
| Accrual for third-party lender-owned cash advances | ||||||||||||
|  | ||||||||||||
| Balance at beginning of period | $ | 2,309 | $ | 1,824 | $ | 1,828 | $ | 1,155 | ||||
| (Decrease) Increase in loss provision | (352) | 8 | 129 | 677 | ||||||||
| Balance at end of period | $ | 1,957 | $ | 1,832 | $ | 1,957 | $ | 1,832 | ||||
|  | ||||||||||||
| Combined statistics (d) | ||||||||||||
| Combined cash advance loss provision | $ | 40,950 | $ | 43,612 | $ | 102,817 | $ | 118,688 | ||||
Combined cash advance loss provision as a % of combined cash advances written (b) | 7.6% | 8.1% | 6.6% | 8.0% | ||||||||
Charge-offs (net of recoveries) as a % of combined cash advances written (b) | 8.1% | 8.3% | 6.6% | 7.2% | ||||||||
Combined allowance for losses and accrued third-party lender losses as a % of combined gross portfolio (b) | 19.0% | 22.6% | 19.0% | 22.6% | ||||||||
|  | ||||||||||||
(a) Cash advances written by the Company for its own account in pawn locations, cash advance locations, and through the 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 locations, cash advance locations and through the 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 SEPTEMBER 30, 2008 AND 2007 (in thousands) | ||||||||||||
|  |  |  |  | |||||||||
|  | ||||||||||||
| Pawn Lending | Cash Advance (1) | Check Cashing | Consolidated | |||||||||
|  | ||||||||||||
| Three months ended September 30, 2008: | ||||||||||||
|  | ||||||||||||
| Revenue | ||||||||||||
| Finance and service charges | $ | 46,977 | $ | - | $ | - | $ | 46,977 | ||||
| Proceeds from disposition of merchandise | 105,517 | - | - | 105,517 | ||||||||
| Cash advance fees | 8,584 | 87,717 | - | 96,301 | ||||||||
| Check cashing fees, royalties and other | 967 | 1,610 | 778 | 3,355 | ||||||||
|  | ||||||||||||
| Total revenue | 162,045 | 89,327 | 778 | 252,150 | ||||||||
|  | ||||||||||||
| Cost of revenue - disposed merchandise | 68,033 | - | - | 68,033 | ||||||||
|  | ||||||||||||
| Net revenue | 94,012 | 89,327 | 778 | 184,117 | ||||||||
|  | ||||||||||||
| Expenses | ||||||||||||
| Operations | 52,344 | 29,065 | 305 | 81,714 | ||||||||
| Cash advance loss provision | 2,725 | 38,225 | - | 40,950 | ||||||||
| Administration | 6,183 | 9,505 | 276 | 15,964 | ||||||||
| Depreciation and amortization | 5,995 | 3,246 | 57 | 9,298 | ||||||||
|  | ||||||||||||
| Total expenses | 67,247 | 80,041 | 638 | 147,926 | ||||||||
|  | ||||||||||||
| Income from operations | $ | 26,765 | $ | 9,286 | $ | 140 | $ | 36,191 | ||||
|  | ||||||||||||
| As of September 30, 2008: | ||||||||||||
|  | ||||||||||||
| Total assets | $ | 625,192 | $ | 448,057 | $ | 7,027 | $ | 1,080,276 | ||||
| Goodwill | $ | 143,998 | $ | 271,532 | $ | 5,310 | $ | 420,840 | ||||
|  | ||||||||||||
|  | ||||||||||||
| Three months ended September 30, 2007: | ||||||||||||
|  | ||||||||||||
| Revenue | ||||||||||||
| Finance and service charges | $ | 41,386 | $ | - | $ | - | $ | 41,386 | ||||
| Proceeds from disposition of merchandise | 91,366 | - | - | 91,366 | ||||||||
| Cash advance fees | 11,301 | 84,116 | - | 95,417 | ||||||||
| Check cashing fees, royalties and other | 698 | 1,826 | 819 | 3,343 | ||||||||
|  | ||||||||||||
| Total revenue | 144,751 | 85,942 | 819 | 231,512 | ||||||||
|  | ||||||||||||
| Cost of revenue - disposed merchandise | 57,693 | - | - | 57,693 | ||||||||
|  | ||||||||||||
| Net revenue | 87,058 | 85,942 | 819 | 173,819 | ||||||||
|  | ||||||||||||
| Expenses | ||||||||||||
| Operations | 48,230 | 27,461 | 279 | 75,970 | ||||||||
| Cash advance loss provision | 4,973 | 38,639 | - | 43,612 | ||||||||
| Administration | 8,312 | 6,632 | 231 | 15,175 | ||||||||
| Depreciation and amortization | 5,272 | 2,901 | 92 | 8,265 | ||||||||
|  | ||||||||||||
| Total expenses | 66,787 | 75,633 | 602 | 143,022 | ||||||||
|  | ||||||||||||
| Income from operations | $ | 20,271 | $ | 10,309 | $ | 217 | $ | 30,797 | ||||
|  | ||||||||||||
| As of September 30, 2007: | ||||||||||||
|  | ||||||||||||
| Total assets | $ | 582,072 | $ | 277,986 | $ | 6,897 | $ | 866,955 | ||||
| Goodwill | $ | 143,665 | $ | 134,579 | $ | 5,310 | $ | 283,554 | ||||
|  | ||||||||||||
| CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES INCOME FROM OPERATIONS BY OPERATING SEGMENT NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007 (in thousands) | ||||||||||||
|  |  |  |  | |||||||||
|  | ||||||||||||
| Pawn Lending |  | Cash Advance (1) |  | Check Cashing |  | Consolidated | ||||||
|  | ||||||||||||
| Nine months ended September 30, 2008: | ||||||||||||
|  | ||||||||||||
| Revenue | ||||||||||||
| Finance and service charges | $ | 133,788 | $ | - | $ | - | $ | 133,788 | ||||
| Proceeds from disposition of merchandise | 330,189 | - | - | 330,189 | ||||||||
| Cash advance fees | 26,514 | 248,096 | - | 274,610 | ||||||||
| Check cashing fees, royalties and other | 2,969 | 6,871 | 2,636 | 12,476 | ||||||||
|  | ||||||||||||
| Total revenue | 493,460 | 254,967 | 2,636 | 751,063 | ||||||||
|  | ||||||||||||
| Cost of revenue - disposed merchandise | 206,290 | - | - | 206,290 | ||||||||
|  | ||||||||||||
| Net revenue | 287,170 | 254,967 | 2,636 | 544,773 | ||||||||
|  | ||||||||||||
| Expenses | ||||||||||||
| Operations | 157,575 | 83,219 | 997 | 241,791 | ||||||||
| Cash advance loss provision | 7,667 | 95,150 | - | 102,817 | ||||||||
| Administration | 28,914 | 25,914 | 824 | 55,652 | ||||||||
| Depreciation and amortization | 17,525 | 10,249 | 182 | 27,956 | ||||||||
|  | ||||||||||||
| Total expenses | 211,681 | 214,532 | 2,003 | 428,216 | ||||||||
|  | ||||||||||||
| Income from operations | $ | 75,489 | $ | 40,435 | $ | 633 | $ | 116,557 | ||||
|  | ||||||||||||
|  | ||||||||||||
| Nine months ended September 30, 2007: | ||||||||||||
|  | ||||||||||||
| Revenue | ||||||||||||
| Finance and service charges | $ | 117,011 | $ | - | $ | - | $ | 117,011 | ||||
| Proceeds from disposition of merchandise | 277,342 | - | - | 277,342 | ||||||||
| Cash advance fees | 31,411 | 229,469 | - | 260,880 | ||||||||
| Check cashing fees, royalties and other | 2,438 | 7,777 | 2,817 | 13,032 | ||||||||
|  | ||||||||||||
| Total revenue | 428,202 | 237,246 | 2,817 | 668,265 | ||||||||
|  | ||||||||||||
| Cost of revenue - disposed merchandise | 172,402 | - | - | 172,402 | ||||||||
|  | ||||||||||||
| Net revenue | 255,800 | 237,246 | 2,817 | 495,863 | ||||||||
|  | ||||||||||||
| Expenses | ||||||||||||
| Operations | 143,706 | 80,074 | 944 | 224,724 | ||||||||
| Cash advance loss provision | 11,542 | 107,146 | - | 118,688 | ||||||||
| Administration | 22,842 | 17,326 | 756 | 40,924 | ||||||||
| Depreciation and amortization | 15,406 | 7,998 | 294 | 23,698 | ||||||||
|  | ||||||||||||
| Total expenses | 193,496 | 212,544 | 1,994 | 408,034 | ||||||||
|  | ||||||||||||
| Income from operations | $ | 62,304 | $ | 24,702 | $ | 823 | $ | 87,829 | ||||
|  | ||||||||||||
| CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES INCOME FROM OPERATIONS BY OPERATING SEGMENT THREE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007 (in thousands) | |
|  | |
|  | |
(1) The Cash Advance segment is comprised of two distribution channels for the same product, a multi-unit, "storefront" platform and an on-line, internet based lending platform, including PBSI, which was acquired in July 2008. The following table summarizes the results from each channel's contributions to the Cash Advance segment as of September 30, 2008 and 2007: | |
|  | Storefront |  | Internet Lending |  |  | Total Cash Advance | |||
|  | |||||||||
| Three months ended September 30, 2008: | |||||||||
|  | |||||||||
| Revenue | |||||||||
| Cash advance fees | $ | 26,859 | $ | 60,858 | $ | 87,717 | |||
| Check cashing fees, royalties and other | 1,553 | 57 | 1,610 | ||||||
|  |  |  | |||||||
| Total revenue | 28,412 | 60,915 | 89,327 | ||||||
|  | |||||||||
| Expenses | |||||||||
| Operations | 17,763 | 11,302 | 29,065 | ||||||
| Cash advance loss provision | 6,411 | 31,814 | 38,225 | ||||||
| Administration | 2,651 | 6,854 | 9,505 | ||||||
| Depreciation and amortization | 1,883 | 1,363 | 3,246 | ||||||
|  | |||||||||
| Total expenses | 28,708 | 51,333 | 80,041 | ||||||
|  | |||||||||
| Income from operations | $ | (296) | $ | 9,582 | $ | 9,286 | |||
|  | |||||||||
|  | |||||||||
| Three months ended September 30, 2007: | |||||||||
|  | |||||||||
| Revenue | |||||||||
| Cash advance fees | $ | 34,249 | $ | 49,867 | $ | 84,116 | |||
| Check cashing fees, royalties and other | 1,826 | - | 1,826 | ||||||
|  | |||||||||
| Total revenue | 36,075 | 49,867 | 85,942 | ||||||
|  | |||||||||
| Expenses | |||||||||
| Operations | 17,194 | 10,267 | 27,461 | ||||||
| Cash advance loss provision | 11,585 | 27,054 | 38,639 | ||||||
| Administration | 2,780 | 3,852 | 6,632 | ||||||
| Depreciation and amortization | 2,072 | 829 | 2,901 | ||||||
|  | |||||||||
| Total expenses | 33,631 | 42,002 | 75,633 | ||||||
|  | |||||||||
| Income from operations | $ | 2,444 | $ | 7,865 | $ | 10,309 | |||
|  |
| CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES INCOME FROM OPERATIONS BY OPERATING SEGMENT NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007 (in thousands) | |||||||||
|  | |||||||||
|  |  |  | |||||||
| Nine months ended September 30, 2008: | Storefront | Internet Lending | Total Cash Advance | ||||||
|  | |||||||||
| Revenue | |||||||||
| Cash advance fees | $ | 82,979 | $ | 165,117 | $ | 248,096 | |||
| Check cashing fees, royalties and other | 6,810 | 61 | 6,871 | ||||||
|  | |||||||||
| Total revenue | 89,789 | 165,178 | 254,967 | ||||||
|  | |||||||||
| Expenses | |||||||||
| Operations | 51,637 | 31,582 | 83,219 | ||||||
| Cash advance loss provision | 17,421 | 77,729 | 95,150 | ||||||
| Administration | 7,992 | 17,922 | 25,914 | ||||||
| Depreciation and amortization | 6,688 | 3,561 | 10,249 | ||||||
|  | |||||||||
| Total expenses | 83,738 | 130,794 | 214,532 | ||||||
|  | |||||||||
| Income from operations | $ | 6,051 | $ | 34,384 | $ | 40,435 | |||
|  | |||||||||
|  | |||||||||
| Nine months ended September 30, 2007: | |||||||||
|  | |||||||||
| Revenue | |||||||||
| Cash advance fees | $ | 95,240 | $ | 134,229 | $ | 229,469 | |||
| Check cashing fees, royalties and other | 7,772 | 5 | 7,777 | ||||||
|  | |||||||||
| Total revenue | 103,012 | 134,234 | 237,246 | ||||||
|  | |||||||||
| Expenses | |||||||||
| Operations | 50,539 | 29,535 | 80,074 | ||||||
| Cash advance loss provision | 28,716 | 78,430 | 107,146 | ||||||
| Administration | 7,935 | 9,391 | 17,326 | ||||||
| Depreciation and amortization | 5,924 | 2,074 | 7,998 | ||||||
|  | |||||||||
| Total expenses | 93,114 | 119,430 | 212,544 | ||||||
|  | |||||||||
| Income from operations | $ | 9,898 | $ | 14,804 | $ | 24,702 | |||
|  | |||||||||
