Cash America Reports Second Quarter Earnings up 40 Percent and Declares Dividend
FORT WORTH, Texas July 21, 2005-- Cash America International, Inc. (NYSE:CSH) announced today that income from continuing operations for the second quarter ended June 30, 2005 was up 40% compared to the same period last year. Income from continuing operations for the 2005 period was $6,900,000 (23 cents per share) after the effect of a $280,000 after-tax charge from foreign currency conversion in the quarter equal to 1 cent per share. Prior year income from continuing operations for the same period of 2004 was $4,926,000 (17 cents per share).
Total revenue for the second quarter of 2005 was up 32% to $133.6 million, from $101.1 million last year. The strong growth in revenue was generated from a 39% increase in combined service charges and fees on pawn loans and fees on cash advance products which benefited from higher outstanding balances and the acquisition of a 41 store chain of lending locations in the fourth quarter of 2004. In addition, revenue from the sale of merchandise in the second quarter was up 26% over the same period in the prior year. These components led to a 36% increase in net revenue for the second quarter of 2005 in comparison to the same period in 2004, as the profit margin on merchandise sold was higher in the current year second quarter compared to the prior year. Consolidated same store net revenue was up 10% for the three-month period ended June 30, 2005 over the same period in 2004.
Commenting on the results of the quarter, Daniel R. Feehan, President and Chief Executive Officer of Cash America said, "We enjoyed the benefit of rising levels of lending assets during the second quarter which led to solid performance in fees and service charges on loans and cash advances. In addition, we were successful in improving sales levels from the first quarter and benefited from higher profit margins on merchandise sold, all of which combined to contribute to the strong top line quarter. We are beginning to enjoy the benefits of the 145 lending locations added over the last twelve months through both start-ups and acquisitions."
For the first six months of fiscal year 2005, Cash America produced an increase in income from continuing operations of 34% to $18,802,000 (62 cents per share) compared to $14,068,000 (48 cents per share) in the same period for the prior year. The increase was achieved on a 28% increase in total revenue, which reached $278,558,000 in the first six months of 2005 compared to $218,161,000 in the first six months of the prior year.
Cash America will host a conference call to discuss the second quarter results on Thursday, July 21st 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.
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 August 3, 2005, and will be paid at the close of business on August 17, 2005.
Forward Looking Statements
As management approaches the last half of fiscal year 2005 it expects the growth in revenue to be largely governed by the growth in lending assets, particularly pawn loans and short-term cash advances. Demand for these products is influenced by economic factors which impact our customers' needs to satisfy immediate capital requirements. In the current economic environment, the demand for the products has been strong and management assumes that these trends will continue. Another factor influencing revenue is regulatory requirements that could restrict customers from qualifying for certain short-term cash advances. Management has developed alternative credit services to assist customers who are unable to qualify for loans from certain lenders due to more restrictive regulatory requirements. The Company began offering these credit services in most of its lending locations affected by this regulatory change early in the third quarter. Remaining lending locations will be transitioned to different regulatory oversight or will be reviewed for other potential alternative products. In management's opinion, these changes will cause revenue levels in some markets to fall but management anticipates that this will mostly be mitigated by continued demand in unaffected markets and the development of new units opened over the last twelve months. In addition, management expects there to be transitional expenses related to the implementation of these new services and programs. Based on the preceding factors, management expects third quarter income from continuing operations to be between 27 cents and 30 cents per share in 2005 compared to 17 cents per share last year. Full year 2005 earnings per share from income from continuing operations are expected to range between $1.45 and $1.50 per share compared to $1.18 per share in fiscal year 2004.
Cash America International, Inc. is a provider of specialty financial services to individuals in the United States with 863 total locations. Cash America is the largest provider of secured non-recourse loans to individuals, commonly referred to as pawn loans, through 456 locations in 21 states under the brand names Cash America Pawn and SuperPawn. The Company also offers short-term cash advances in many of its U.S. locations including 271 locations that offer this service under the brand names Cash America Payday Advance and Cashland. In addition, check cashing services are provided through its 136 franchised and Company-owned "Mr. Payroll" check cashing centers.
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, changes to the products and services the Company makes available to consumers, 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, the enactment, change or interpretation of tax and other laws and governmental rules and regulations applicable to the Company's business, 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, and, in many cases, the Company cannot predict 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 Six Months Ended
June 30, June 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Consolidated Operations:
Total revenue $133,569 $101,143 $278,558 $218,161
Net revenue $94,630 $69,805 $191,664 $145,994
Total operating expenses $81,074 $59,914 $156,856 $119,557
Income from operations $13,556 $9,891 $34,808 $26,437
Income from continuing
operations before income
taxes $11,042 $7,877 $29,891 $22,331
Income from Continuing
Operations $6,900 $4,926 $18,802 $14,068
Income from Discontinued
Operations $-- $2,413 $-- $4,661
Net Income $6,900 $7,339 $18,802 $18,729
Earnings per share:
Basic -
Income from continuing
operations $0.24 $0.17 $0.64 $0.50
Net income $0.24 $0.26 $0.64 $0.66
Diluted -
Income from continuing
operations $0.23 $0.17 $0.62 $0.48
Net income $0.23 $0.25 $0.62 $0.64
Weighted average shares:
Basic 29,219 28,254 29,275 28,247
Diluted 30,079 29,443 30,256 29,448
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
June 30,
-------------------- December 31,
2005 2004 2004
---------- --------- ------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $11,771 $9,081 $15,103
Pawn loans 116,046 87,427 109,353
Cash advances, net 42,742 27,972 36,490
Merchandise held for disposition,
net 61,846 47,317 67,050
Finance and service charges
receivable 19,666 15,365 20,458
Other receivables and prepaid
expenses 12,480 7,404 10,547
Income taxes recoverable 1,064 -- --
Deferred tax assets 11,293 7,820 9,293
Current assets of discontinued
operations -- 84,618 --
---------- --------- ------------
Total current assets 276,908 287,004 268,294
Property and equipment, net 91,224 71,495 87,612
Goodwill 167,190 104,373 164,073
Intangible assets, net 23,078 4,206 24,361
Other assets 10,464 1,611 10,825
Non-current assets of discontinued
operations -- 30,584 --
---------- --------- ------------
Total assets $568,864 $499,273 $555,165
========== ========= ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued
expenses $31,004 $29,794 $33,854
Customer deposits 6,388 4,899 5,686
Income taxes currently payable -- 1,411 2,505
Current portion of long-term debt 16,786 8,286 16,786
Current liabilities of
discontinued operations -- 3,499 --
---------- --------- ------------
Total current liabilities 54,178 47,889 58,831
Deferred tax liabilities 12,654 5,957 10,999
Other liabilities 1,437 1,487 1,559
Long-term debt 152,421 134,691 149,840
Non-current liabilities of
discontinued operations -- 14,593 --
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 155,357 143,252 154,294
Retained earnings 205,219 159,382 187,860
Accumulated other comprehensive
income -- 8,085 --
Notes receivable secured by common
stock (2,488) (2,488) (2,488)
Treasury shares, at cost
(1,108,189 shares, 1,987,207
shares and 938,386 shares at June
30, 2005 and 2004, and December
31, 2004, respectively) (12,938) (16,599) (8,754)
---------- --------- ------------
Total stockholders' equity 348,174 294,656 333,936
---------- --------- ------------
Total liabilities and
stockholders' equity $568,864 $499,273 $555,165
========== ========= ============
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -----------------
2005 2004 2005 2004
---------- -------- -------- --------
(Unaudited)
Revenue
Finance and service charges $32,577 $25,355 $66,496 $52,227
Proceeds from disposition of
merchandise 65,333 51,695 144,074 118,743
Cash advance fees 33,376 22,061 61,686 41,717
Check cashing royalties and
fees 2,283 2,032 6,302 5,474
---------- -------- -------- --------
Total Revenue 133,569 101,143 278,558 218,161
Cost of Revenue
Disposed merchandise 38,939 31,338 86,894 72,167
---------- -------- -------- --------
Net Revenue 94,630 69,805 191,664 145,994
---------- -------- -------- --------
Expenses
Operations 54,027 40,892 107,700 82,460
Cash advance loss provision 10,769 5,375 16,403 8,419
Administration 10,604 9,583 21,513 20,690
Depreciation and amortization 5,674 4,064 11,240 7,988
---------- -------- -------- --------
Total Expenses 81,074 59,914 156,856 119,557
---------- -------- -------- --------
Income from Operations 13,556 9,891 34,808 26,437
Interest expense 2,490 2,051 4,827 4,182
Interest income (407) (37) (825) (76)
Foreign currency transaction
losses 431 -- 915 --
---------- -------- -------- --------
Income from Continuing
Operations before Income Taxes 11,042 7,877 29,891 22,331
Provision for income taxes 4,142 2,951 11,089 8,263
---------- -------- -------- --------
Income from Continuing
Operations 6,900 4,926 18,802 14,068
---------- -------- -------- --------
Income from discontinued
operations before income
taxes -- 3,456 -- 6,688
Provision for income taxes -- 1,043 -- 2,027
---------- -------- -------- --------
Income from discontinued
operations -- 2,413 -- 4,661
---------- -------- -------- --------
Net Income $6,900 $7,339 $18,802 $18,729
========== ======== ======== ========
Earnings Per Share:
Basic -
Income from continuing
operations $0.24 $0.17 $0.64 $0.50
Income from discontinued
operations $-- $0.09 $-- $0.17
Net income $0.24 $0.26 $0.64 $0.66
Diluted -
Income from continuing
operations $0.23 $0.17 $0.62 $0.48
Income from discontinued
operations $-- $0.08 $-- $0.16
Net income $0.23 $0.25 $0.62 $0.64
Weighted average common shares
outstanding:
Basic 29,219 28,254 29,275 28,247
Diluted 30,079 29,443 30,256 29,448
Dividends declared per common
share $0.025 $0.0175 $0.050 $0.035
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
FINANCIAL AND OPERATING DATA - CONTINUING OPERATIONS
(in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2005 2004 2005 2004
---------- -------- --------- ---------
PAWN LENDING OPERATIONS:
Pawn loans
Annualized yield on pawn
loans 122.6 % 127.2 % 127.6 % 133.7 %
Total amount of pawn loans
written and renewed $114,348 $87,349 $212,178 $163,913
Average pawn loan balance
outstanding $106,547 $80,203 $105,118 $78,546
Average pawn loan balance
per average location in
operation $240 $203 $238 $198
Ending pawn loan balance
per location in operation $261 $221 $261 $221
Average pawn loan amount at
end of period (not in
thousands) $88 $84 $88 $84
Profit margin on
disposition of merchandise
as a percentage of
proceeds from disposition
of merchandise 40.4 % 39.4 % 39.7 % 39.2 %
Average annualized
merchandise turnover 2.6x 2.8x 2.8x 3.2x
Average balance of
merchandise held for
disposition per average
location in operation $135 $113 $141 $116
Ending balance of
merchandise held for
disposition per location
in operation $139 $119 $139 $119
Pawnshop locations in
operation -
Beginning of period,
owned 441 396 441 398
Acquired 2 -- 2 --
Start-ups 2 -- 3 --
Combined or closed -- -- (1) (2)
---------- -------- --------- ---------
End of period, owned 445 396 445 396
Franchise locations at
end of period 11 6 11 6
---------- -------- --------- ---------
Total pawnshop locations
at end of period 456 402 456 402
========== ======== ========= =========
Average number of owned
pawnshop locations in
operation 444 396 442 396
========== ======== ========= =========
Cash advances
Total amount of cash
advances written (a) $68,191 $50,469 $124,931 $95,108
Number of cash advances
written (not in
thousands)(a) 209,342 156,786 379,920 295,740
Average amount per cash
advances (not in
thousands) (a) $326 $322 $329 $322
Combined cash advances
outstanding(a) $20,279 $14,663 $20,279 $14,663
Cash advances outstanding
per location at end of
period(a) $47 $38 $47 $38
Cash advances outstanding
before allowance for
losses(b) $13,193 $9,859 $13,193 $9,859
Locations offering cash
advances at end of period 429 388 429 388
========== ======== ========= =========
Average number of locations
offering cash advances 428 388 427 388
========== ======== ========= =========
CASH ADVANCE OPERATIONS (c):
Total amount of cash
advances written(a) $156,150 $93,801 $278,235 $171,551
Number of cash advances
written (not in
thousands)(a) 434,911 277,017 785,461 505,941
Average amount per cash
advance (not in
thousands)(a) $359 $339 $354 $339
Combined cash advances
outstanding (a) $42,520 $23,783 $42,520 $23,783
Cash advances outstanding
per location at end of
period(a) $157 $131 $157 $131
Cash advances outstanding
before allowance for
losses(b) $37,269 $22,769 $37,269 $22,769
Cash advance locations in
operation -
Beginning of period 264 164 253 154
Acquired 1 -- 1 --
Start-ups 6 19 19 29
Combined or closed -- (2) (2) (2)
---------- -------- --------- ---------
End of period 271 181 271 181
========== ======== ========= =========
Average number of cash
advance locations in
operation 267 171 262 165
========== ======== ========= =========
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
CHECK CASHING OPERATIONS (Mr.
Payroll Corp.)(d)
Face amount of checks cashed $277,595 $261,680 $614,623 $583,867
Gross fees collected $3,756 $3,561 $8,770 8,360
Fees as a percentage of
checks cashed 1.4 % 1.4 % 1.4 % 1.4 %
Average check cashed (not in
thousands) $367 $347 $393 $385
Centers in operation at end
of period 136 138 136 138
========= ========= ========= =========
Average centers in operation
for period 135 138 135 137
========= ========= ========= =========
(a) Includes cash advances made by the Company and cash advances made
by third-party banks offered at the Company's locations
(b) Amounts recorded in the Company's consolidated financial
statements.
(c) Includes only cash advance locations.
(d) Includes franchised and company-owned locations.
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED CASH ADVANCES OUTSTANDING
($ in thousands)
June 30,
--------------------
2005 2004
---------- ---------
Originated by the Company
Active cash advances and fees receivable $30,220 $19,422
Cash advances and fees in collection 6,840 4,860
---------- ---------
Total originated by the Company 37,060 24,282
---------- ---------
Originated by banks
Active cash advances and fees receivable 19,531 10,934
Cash advances and fees in collection 6,208 3,230
---------- ---------
Total originated by banks 25,739 14,164
---------- ---------
Combined gross portfolio 62,799 38,446
Less: Elimination of cash advances owned by banks 11,466 5,373
Less: Discount on cash advances assigned by banks 871 445
---------- ---------
Company cash advances and fees receivable, gross 50,462 32,628
Less: Allowance for losses 7,720 4,656
---------- ---------
Cash advances and fees receivable, net $42,742 $27,972
========== =========
ALLOWANCE FOR LOSSES ON CASH ADVANCES
($ in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -----------------
2005 2004 2005 2004
----------- ------- -------- --------
Company-owned cash advances
Balance at beginning of period $3,096 $2,648 $4,358 $3,393
Cash advance loss provision 10,457 5,107 16,138 8,165
Charge-offs (7,861) (4,880) (17,701) (10,759)
Recoveries 2,028 1,781 4,925 3,857
----------- ------- -------- --------
Balance at end of period $7,720 $4,656 $7,720 $4,656
=========== ======= ======== ========
Accrual for bank-owned cash
advances
Balance at beginning of period $295 $41 $342 $55
Increase in loss provision 312 268 265 254
----------- ------- -------- --------
Balance at end of period $607 $309 $607 $309
=========== ======= ======== ========
Combined statistics
Combined cash advance loss
provision $10,769 $5,375 $16,403 $8,419
=========== ======= ======== ========
Combined cash advance loss
provision as a % of combined
cash advance written 4.8 % 3.7 % 4.1 % 3.2 %
=========== ======= ======== ========
Charge-offs (net of recoveries)
as a % of combined cash
advances written 2.6 % 2.1 % 3.2 % 2.6 %
=========== ======= ======== ========
Combined allowance for losses
and accrued bank losses as a %
of combined gross portfolio 13.3 % 12.9 % 13.3 % 12.9 %
=========== ======= ======== ========
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
INCOME FROM CONTINUING OPERATIONS BY OPERATING SEGMENT
THREE MONTHS ENDED JUNE 30, 2005 AND 2004
(in thousands)
Pawn Cash Check
Lending Advance Cashing Consolidated
--------- --------- ---------- ------------
Three Months Ended June
30, 2005:
-----------------------
Revenue
Finance and service
charges $32,577 $-- $-- $32,577
Proceeds from disposition
of merchandise 65,333 -- -- 65,333
Cash advance fees 10,050 23,326 -- 33,376
Check cashing royalties
and fees -- 1,440 843 2,283
--------- --------- ---------- ------------
Total revenue 107,960 24,766 843 133,569
Cost of revenue - disposed
merchandise 38,939 -- -- 38,939
--------- --------- ---------- ------------
Net revenue 69,021 24,766 843 94,630
--------- --------- ---------- ------------
Expenses
Operations 40,998 12,703 326 54,027
Cash advance loss
provision 4,075 6,694 -- 10,769
Administration 8,016 2,349 239 10,604
Depreciation and
amortization 3,817 1,777 80 5,674
--------- --------- ---------- ------------
Total expenses 56,906 23,523 645 81,074
--------- --------- ---------- ------------
Income from continuing
operations $12,115 $1,243 $198 $13,556
========= ========= ========== ============
As of June 30, 2005:
-----------------------
Total assets $450,362 $111,683 $6,819 $568,864
========= ========= ========== ============
Three Months Ended June
30, 2004:
-----------------------
Revenue
Finance and service
charges $25,355 $-- $-- $25,355
Proceeds from disposition
of merchandise 51,695 -- -- 51,695
Cash advance fees 7,509 14,552 -- 22,061
Check cashing royalties
and fees -- 1,172 860 2,032
--------- --------- ---------- ------------
Total revenue 84,559 15,724 860 101,143
Cost of revenue - disposed
merchandise 31,338 -- -- 31,338
--------- --------- ---------- ------------
Net revenue 53,221 15,724 860 69,805
--------- --------- ---------- ------------
Expenses
Operations 32,376 8,175 341 40,892
Cash advance loss
provision 2,064 3,311 -- 5,375
Administration 7,270 2,026 287 9,583
Depreciation and
amortization 2,882 1,058 124 4,064
--------- --------- ---------- ------------
Total expenses 44,592 14,570 752 59,914
--------- --------- ---------- ------------
Income from continuing
operations $8,629 $1,154 $108 $9,891
========= ========= ========== ============
As of June 30, 2004:
--------------------------
Total assets $300,369 $76,201 $7,501 $384,071
========= ========= ========== ============
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
INCOME FROM CONTINUING OPERATIONS BY OPERATING SEGMENT
SIX MONTHS ENDED JUNE 30, 2005
(in thousands)
Pawn Cash Check
Lending Advance Cashing Consolidated
--------- --------- ---------- ------------
Six Months Ended June 30,
2005:
-------------------------
Revenue
Finance and service
charges $66,496 $-- $-- $66,496
Proceeds from disposition
of merchandise 144,074 -- -- 144,074
Cash advance fees 19,030 42,656 -- 61,686
Check cashing royalties
and fees -- 4,328 1,974 6,302
--------- --------- ---------- ------------
Total revenue 229,600 46,984 1,974 278,558
Cost of revenue - disposed
merchandise 86,894 -- -- 86,894
--------- --------- ---------- ------------
Net revenue 142,706 46,984 1,974 191,664
--------- --------- ---------- ------------
Expenses
Operations 81,916 25,076 708 107,700
Cash advance loss
provision 6,268 10,135 -- 16,403
Administration 16,378 4,661 474 21,513
Depreciation and
amortization 7,609 3,468 163 11,240
--------- --------- ---------- ------------
Total expenses 112,171 43,340 1,345 156,856
--------- --------- ---------- ------------
Income from continuing
operations $30,535 $3,644 $629 $34,808
========= ========= ========== ============
Six Months Ended June 30,
2004:
--------------------------
Revenue
Finance and service
charges $52,227 $-- $-- $52,227
Proceeds from disposition
of merchandise 118,743 -- -- 118,743
Cash advance fees 14,628 27,089 -- 41,717
Check cashing royalties
and fees -- 3,492 1,982 5,474
--------- --------- ---------- ------------
Total revenue 185,598 30,581 1,982 218,161
Cost of revenue - disposed
merchandise 72,167 -- -- 72,167
--------- --------- ---------- ------------
Net revenue 113,431 30,581 1,982 145,994
--------- --------- ---------- ------------
Expenses
Operations 66,312 15,427 721 82,460
Cash advance loss
provision 3,420 4,999 -- 8,419
Administration 16,351 3,844 495 20,690
Depreciation and
amortization 5,749 2,001 238 7,988
--------- --------- ---------- ------------
Total expenses 91,832 26,271 1,454 119,557
--------- --------- ---------- ------------
Income from continuing
operations $21,599 $4,310 $528 $26,437
========= ========= ========== ============
Contacts
Cash America International, Inc., Fort Worth
Thomas A. Bessant, Jr., 817-335-1100
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