Attached files
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| 8-K - CASH AMERICA INTERNATIONAL, INC. 8-K - CASH AMERICA INTERNATIONAL INC | a50254060.htm |
Exhibit 99.1
Cash America First Quarter EPS Increases 15% and Declares Dividend
FORT WORTH, Texas--(BUSINESS WIRE)--April 26, 2012--Cash America International, Inc. (NYSE: CSH) announced today that earnings per share increased 15% as net income attributable to the Company for the first quarter ended March 31, 2012 rose to $41,467,000 ($1.30 per share) compared to net income of $36,378,000 ($1.13 per share) for the same period in 2011. Earnings per share for the first three months of 2012 is above the consensus of published analyst estimates of $1.19 per share and is at the high end of the range of published analyst estimates of between $1.15 and $1.30 per share. The Company’s outlook for earnings expectations has not been updated since July 21, 2011 due to the filing of a Registration Statement on Form S-1with the Securities and Exchange Commission by the Company’s wholly-owned subsidiary that comprises its e-commerce segment, Enova International, Inc. (“Enova”), on September 15, 2011 for the proposed offering of Enova’s common stock in an initial public offering. The results for the first quarter exceeded the consensus of published analysts’ expectations due to higher overall revenue, primarily related to domestic pawn lending activities and growth in the international operations of the Company’s e-commerce segment.
Consolidated total revenue increased 25% to $457.5 million for the quarter ended March 31, 2012 compared to $364.9 million in the same period in 2011. Contributing to the growth in consolidated total revenue for the first quarter of 2012 was a 22% increase in proceeds from the disposition of merchandise and a 15% increase in pawn loan fees and service charges attributable to the Company’s U.S. pawn lending business during the quarter compared to the same quarter in 2011. The Company’s e-commerce segment generated a 47% increase in total revenue for the first quarter of 2012 compared to the first quarter of 2011, due primarily to the 91% growth in revenue attributable to its foreign operations during the quarter compared to the same period in 2011.
Consolidated net revenue increased 19% to $256.8 million for the first quarter of 2012 compared $216.1 million for the first quarter of 2011. Consolidated net revenue, which represents total revenue less the cost of disposed merchandise and the loss provision for consumer loans, benefited from a sequential increase in gross profit margin on the sale of merchandise from the quarter ended December 31, 2011 and a sequential decrease in the loan loss provision as a percentage of consumer loan fees from the quarter ended December 31, 2011. Gross profit margin on the disposition of merchandise increased sequentially from 32.6% to 33.6% from the three months ended December 31, 2011 to the three months ended March 31, 2012, respectively, and losses as a percentage of consumer loan fees decreased from 44.7% to 36.1% over the same periods, respectively. These improved metrics contributed to the Company’s reported results exceeding analyst expectations for the first quarter of 2012 as it posted a 15% increase in operating income from the retail services segment and a 33% increase in operating income from the e-commerce segment for the three months ended March 31, 2012 compared to the three months ended March 31, 2011.
Commenting on the first quarter results, Daniel R. Feehan, President and Chief Executive Officer of Cash America said, “The business activities in the first quarter of 2012 started out as we expected with continued strong seasonal growth in short term loan demand as we began the year, followed by a healthy increase in retail sales later in the quarter. Sustained demand for pawn loans led to a 14% year-over-year increase in our U.S. pawn loan balances as of March 31, 2012, and consumer loan balances continue to grow as both U.S. and foreign lending activities contributed to over a 50% increase in combined gross balances.”
Cash America will host a conference call to discuss the first quarter results on Thursday, April 26 at 7:00 AM 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 prior to the call 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 shares outstanding. The dividend will be paid at the close of business on May 23, 2012 to shareholders of record on May 9, 2012.
The Registration Statement on Form S-1 that was filed on September 15, 2011 with the Securities and Exchange Commission in connection with a proposed initial public offering of Enova common stock by the Company and Enova has not yet become effective, which restricts the Company from issuing earnings guidance for the 2012 second quarter and year ending 2012 at this time.
About the Company
As of March 31, 2012, Cash America International, Inc. had 1,080 total locations offering specialty financial services to consumers, which include 786 lending locations (including one unconsolidated franchised location) operating in 23 states in the United States under the names “Cash America Pawn,” “SuperPawn,” “Pawn X-Change,” “Cash America Payday Advance,” and “Cashland,” and 193 pawn lending locations, of which the Company is a majority owner, operating in 21 jurisdictions in central and southern Mexico under the name “Prenda Fácil.” The Company also operated 95 unconsolidated franchised and six Company-owned check cashing centers operating in 16 states in the United States under the name “Mr. Payroll” as of March 31, 2012. Additionally, as of March 31, 2012, the Company offered consumer loans over the Internet to customers in 32 states in the United States at http://www.cashnetusa.com, in the United Kingdom at http://www.quickquid.co.uk and http://www.poundstopocket.co.uk, in Australia at http://www.dollarsdirect.com.au, and in Canada at http://www.dollarsdirect.ca.
For additional information regarding the Company and the services it provides, visit the Company’s websites located at:
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http://www.cashamerica.com |
http://www.dollarsdirect.com.au |
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http://www.enova.com |
http://www.dollarsdirect.ca |
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http://www.cashnetusa.com |
http://www.goldpromise.com |
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http://www.cashlandloans.com |
http://www.mrpayroll.com |
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http://www.quickquid.co.uk |
http://www.primaryinnovations.net |
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http://www.poundstopocket.co.uk |
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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 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 domestic and foreign pawn, consumer credit, tax and other laws and governmental rules and regulations applicable to the Company's business or changes in the interpretation or enforcement thereof; the potential regulation of consumer financial products and services by the Consumer Financial Protection Bureau; acceptance by consumers, legislators or regulators of the negative characterization by the media and consumer activists with respect to certain of the Company’s loan products; risks related to the Company’s previously-announced proposed initial public offering of Enova; the deterioration of the political, regulatory or economic environment in foreign countries where the Company operates or in the future may operate; the actions of third parties who provide, acquire or offer products and services to, from or for the Company; changes in demand for the Company's services and the continued acceptance of the online distribution channel by the Company’s online loan customers; fluctuations in the price of gold; changes in competition; the ability of the Company to open new locations in accordance with its plans or to successfully integrate newly acquired businesses into the Company’s operations; interest rate and foreign currency exchange rate fluctuations; the effect of any current or future litigation proceedings or any judicial decisions or rule-making that affect the Company’s arbitration agreements; changes in the capital markets; changes in the Company’s ability to satisfy its debt obligations or to refinance existing debt obligations or obtain new capital to finance growth; a prolonged interruption in the Company’s operations of its facilities, systems and business functions, including its information technology and other business systems; security breaches, cyber attacks or fraudulent activity; the implementation of new, or changes in the interpretation of existing, accounting principles or financial reporting requirements; acts of God, war or terrorism, pandemics and other events; the effect of any of such changes on the Company’s business or the markets in which it operates; and other risks and uncertainties indicated in the Company's filings with the Securities and Exchange Commission. These risks and uncertainties are beyond the ability of the Company to control, nor can the Company predict, in many cases, all of the risks and uncertainties that could cause its actual results to differ materially from those indicated by the forward-looking statements. When used in this release, terms such as “believes,” “estimates,” “should,” “could,” “would,” “plans,” “expects,” “anticipates,” “may,” “forecasts,” “projects” and similar expressions and variations as they relate to the Company or its management are intended to identify forward-looking statements. The Company disclaims any intention or obligation to update or revise any forward-looking statements to reflect events or circumstances occurring after the date of this release.
On September 15, 2011, Enova, a wholly-owned subsidiary of the Company that comprises its e-commerce segment, filed a registration statement on Form S-1 with the Securities and Exchange Commission in connection with a proposed initial public offering of Enova common stock. The registration statement on Form S-1 that was filed with the Securities and Exchange Commission by Enova has not become effective. The offering of common stock of Enova is subject to numerous conditions, including market conditions, and the Company and Enova can provide no assurance that an offering will be made or completed. The securities to be offered under Enova’s registration statement may not be sold, nor may offers to buy be accepted prior to the time that the registration statement becomes effective. The information contained in this press release shall not constitute an offer to sell or a solicitation of an offer to buy these securities.
| CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||
| HIGHLIGHTS OF CONSOLIDATED RESULTS OF OPERATIONS | ||||||
| (dollars in thousands, except per share data) | ||||||
| (Unaudited) | ||||||
| Three Months Ended | ||||||
| March 31, | ||||||
| 2012 | 2011 | |||||
| Consolidated Operations: | ||||||
| Total revenue | $ | 457,488 | $ | 364,864 | ||
| Net revenue | 256,784 | 216,128 | ||||
| Total operating expenses | 184,776 | 152,900 | ||||
| Income from operations | $ | 72,008 | $ | 63,228 | ||
| Income before income taxes | 64,831 | 57,539 | ||||
| Net Income | $ | 40,523 | $ | 35,787 | ||
| Net loss attributable to the noncontrolling interest | 944 | 591 | ||||
| Net Income Attributable to Cash America International, Inc. | $ | 41,467 | $ | 36,378 | ||
| Earnings per share: | ||||||
| Net Income attributable to Cash America International, Inc. common shareholders: | ||||||
| Basic | $ | 1.40 | $ | 1.22 | ||
| Diluted | $ | 1.30 | $ | 1.13 | ||
| Weighted average shares: | ||||||
| Basic | 29,616 | 29,755 | ||||
| Diluted | 31,912 | 32,060 | ||||
| CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||
| (Unaudited) | ||||||||||||
| March 31, | December 31, | |||||||||||
| 2012 | 2011 | 2011 | ||||||||||
| Assets | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | $ | 63,606 | $ | 42,414 | $ | 62,542 | ||||||
| Pawn loans | 206,343 | 186,937 | 253,519 | |||||||||
| Consumer loans, net | 200,365 | 126,135 | 222,778 | |||||||||
| Merchandise held for disposition, net | 139,519 | 117,784 | 161,884 | |||||||||
| Pawn loan fees and service charges receivable | 38,797 | 35,530 | 48,003 | |||||||||
| Prepaid expenses and other assets | 34,213 | 31,566 | 31,301 | |||||||||
| Deferred tax assets | 32,312 | 26,606 | 35,065 | |||||||||
| Total current assets | 715,155 | 566,972 | 815,092 | |||||||||
| Property and equipment, net | 250,722 | 220,817 | 246,429 | |||||||||
| Goodwill | 567,830 | 545,665 | 562,721 | |||||||||
| Intangible assets, net | 33,956 | 29,584 | 34,771 | |||||||||
| Other assets | 15,074 | 14,738 | 15,236 | |||||||||
| Total assets | $ | 1,582,737 | $ | 1,377,776 | $ | 1,674,249 | ||||||
| Liabilities and Equity | ||||||||||||
| Current liabilities: | ||||||||||||
| Accounts payable and accrued expenses | $ | 88,472 | $ | 82,213 | $ | 113,113 | ||||||
| Customer deposits | 11,464 | 10,434 | 9,935 | |||||||||
| Income taxes currently payable | 19,894 | 12,823 | 12,880 | |||||||||
| Current portion of long-term debt | 35,939 | 17,689 | 34,273 | |||||||||
| Total current liabilities | 155,769 | 123,159 | 170,201 | |||||||||
| Deferred tax liabilities | 92,277 | 64,435 | 89,712 | |||||||||
| Noncurrent income tax payable | 2,602 | 2,568 | 2,315 | |||||||||
| Other liabilities | 1,254 | 1,935 | 1,413 | |||||||||
| Long-term debt | 371,969 | 352,883 | 503,018 | |||||||||
| Total liabilities | $ | 623,871 | $ | 544,980 | $ | 766,659 | ||||||
| Equity: | ||||||||||||
| Cash America International, Inc. equity: | ||||||||||||
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Common stock, $0.10 par value per share, 80,000,000 shares authorized, 30,235,164 shares issued and outstanding |
3,024 | 3,024 | 3,024 | |||||||||
| Additional paid-in capital | 164,722 | 164,516 | 167,683 | |||||||||
| Retained earnings | 816,496 | 679,546 | 776,060 | |||||||||
| Accumulated other comprehensive income (loss) | 3,460 | 9,677 | (6,896 | ) | ||||||||
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Treasury shares, at cost (888,336 shares, 869,699 shares and 1,011,356 shares at March 31, 2012 and 2011, and at December 31, 2011, respectively) |
(33,051 | ) | (29,935 | ) | (37,419 | ) | ||||||
| Total Cash America International, Inc. shareholders' equity | 954,651 | 826,828 | 902,452 | |||||||||
| Noncontrolling interest | 4,215 | 5,968 | 5,138 | |||||||||
| Total equity | 958,866 | 832,796 | 907,590 | |||||||||
| Total liabilities and equity | $ | 1,582,737 | $ | 1,377,776 | $ | 1,674,249 | ||||||
| CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||
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(in thousands, except per share data) |
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(Unaudited) |
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| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2012 | 2011 | |||||||
| Revenue | ||||||||
| Pawn loan fees and service charges | $ | 72,899 | $ | 65,282 | ||||
| Proceeds from disposition of merchandise | 208,383 | 171,927 | ||||||
| Consumer loan fees | 172,840 | 123,127 | ||||||
| Other | 3,366 | 4,528 | ||||||
| Total Revenue | 457,488 | 364,864 | ||||||
| Cost of Revenue | ||||||||
| Disposed merchandise | 138,321 | 109,236 | ||||||
| Consumer loan loss provision | 62,383 | 39,500 | ||||||
| Total Cost of Revenue | 200,704 | 148,736 | ||||||
| Net Revenue | 256,784 | 216,128 | ||||||
| Expenses | ||||||||
| Operations and administration | 170,155 | 140,458 | ||||||
| Depreciation and amortization | 14,621 | 12,442 | ||||||
| Total Expenses | 184,776 | 152,900 | ||||||
| Income from Operations | 72,008 | 63,228 | ||||||
| Interest expense | (7,176 | ) | (5,611 | ) | ||||
| Interest income | 29 | 22 | ||||||
| Foreign currency transaction gain (loss) | 87 | (96 | ) | |||||
| Equity in loss of unconsolidated subsidiary | (117 | ) | (4 | ) | ||||
| Income before Income Taxes | 64,831 | 57,539 | ||||||
| Provision for income taxes | 24,308 | 21,752 | ||||||
| Net Income | 40,523 | 35,787 | ||||||
| Net loss attributable to the noncontrolling interest | 944 | 591 | ||||||
| Net Income Attributable to Cash America International, Inc. | $ | 41,467 | $ | 36,378 | ||||
| Earnings Per Share: | ||||||||
| Net Income attributable to Cash America International, Inc. common shareholders: | ||||||||
| Basic | $ | 1.40 | $ | 1.22 | ||||
| Diluted | $ | 1.30 | $ | 1.13 | ||||
| Weighted average common shares outstanding: | ||||||||
| Basic | 29,616 | 29,755 | ||||||
| Diluted | 31,912 | 32,060 | ||||||
| Dividends declared per common share | $ | 0.035 | $ | 0.035 | ||||
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CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES |
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PAWN LENDING ACTIVITIES – FINANCIAL AND OPERATING DATA |
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(dollars in thousands, except where otherwise noted) |
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The following table outlines certain data related to the Company’s pawn loan activities as of and for the three months ended March 31, 2012 and 2011. |
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| 2012 | 2011 | |||||||||||||||||||||||
| Domestic | Foreign | Total | Domestic | Foreign | Total | |||||||||||||||||||
| As of March 31, | ||||||||||||||||||||||||
| Ending pawn loan balances | $ | 189,721 | $ | 16,622 | $ | 206,343 | $ | 166,074 | $ | 20,863 | $ | 186,937 | ||||||||||||
| Ending merchandise balance, net | $ | 128,206 | $ | 11,313 | $ | 139,519 | $ | 110,490 | $ | 7,294 | $ | 117,784 | ||||||||||||
| Three Months Ended March 31, | ||||||||||||||||||||||||
| Pawn loan fees and service charges | $ | 69,413 | $ | 3,486 | $ | 72,899 | $ | 60,226 | $ | 5,056 | $ | 65,282 | ||||||||||||
| Average pawn loan balance outstanding | $ | 214,836 | $ | 16,067 | $ | 230,903 | $ | 180,885 | $ | 20,377 | $ | 201,262 | ||||||||||||
| Amount of pawn loans written and renewed | $ | 205,454 | $ | 18,635 | $ | 224,089 | $ | 179,539 | $ | 20,886 | $ | 200,425 | ||||||||||||
| Annualized yield on pawn loans | 129.9 | % | 87.3 | % | 127.0 | % | 135.0 | % | 100.6 | % | 131.5 | % | ||||||||||||
| Gross profit margin on disposition of merchandise | 35.1 | % | 9.7 | % | 33.6 | % | 38.0 | % | 14.3 | % | 36.5 | % | ||||||||||||
| Merchandise turnover | 3.5 | 4.0 | 3.6 | 3.4 | 5.5 | 3.5 | ||||||||||||||||||
| CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||
| MERCHANDISE DISPOSITION, GROSS PROFIT AND OPERATING DATA | ||||||||||||||||||||||||
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(dollars in thousands) |
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Profit from the disposition of merchandise represents the proceeds received from the disposition of merchandise in excess of the cost of disposed merchandise, which is the Company’s cost basis in the loan or the amount paid for the purchased merchandise. Retail sales include the sale of jewelry and general merchandise direct to consumers through any of the Company’s retail services locations or the Internet. Commercial sales include the sale of refined gold, platinum, silver, and diamonds to brokers or manufacturers. The following table summarizes the proceeds from the disposition of merchandise and the related profit for the three months ended March 31, 2012 and 2011. |
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| Three Months Ended March 31, | ||||||||||||||||||||||||
| 2012 | 2011 | |||||||||||||||||||||||
| Retail | Commercial | Total | Retail | Commercial | Total | |||||||||||||||||||
| Proceeds from disposition | $ | 112,032 | $ | 96,351 | $ | 208,383 | $ | 97,440 | $ | 74,487 | $ | 171,927 | ||||||||||||
| Gross profit on disposition | $ | 41,746 | $ | 28,316 | $ | 70,062 | $ | 38,485 | $ | 24,206 | $ | 62,691 | ||||||||||||
| Gross profit margin | 37.3 | % | 29.4 | % | 33.6 | % | 39.5 | % | 32.5 | % | 36.5 | % | ||||||||||||
| Percentage of total gross profit | 59.6 | % | 40.4 | % | 100.0 | % | 61.4 | % | 38.6 | % | 100.0 | % | ||||||||||||
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The table below summarizes the age of merchandise held for disposition before valuation allowance of $0.7 million at March 31, 2012 and 2011 (dollars in thousands). |
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| As of March 31, | |||||||||||
| 2012 | 2011 | ||||||||||
| Amount | % | Amount | % | ||||||||
| Jewelry - held for one year or less | $ | 87,597 | 62.5 | $ | 79,048 | 66.7 | |||||
| Other merchandise - held for one year or less | 46,250 | 33.0 | 34,474 | 29.1 | |||||||
| Total merchandise held for one year or less | 133,847 | 95.5 | 113,522 | 95.8 | |||||||
| Jewelry - held for more than one year | 2,708 | 1.9 | 2,232 | 1.9 | |||||||
| Other merchandise - held for more than one year | 3,664 | 2.6 | 2,730 | 2.3 | |||||||
| Total merchandise held for more than one year | 6,372 | 4.5 | 4,962 | 4.2 | |||||||
| Total merchandise held for disposition | $ | 140,219 | 100.0 | $ | 118,484 | 100.0 | |||||
| CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||
| CONSUMER LOAN FINANCIAL AND OPERATING DATA | ||||||||||||||||||||||||
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(dollars in thousands, except where otherwise noted) |
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The following table sets forth consumer loan fees by segment, adjusted for the deduction of the loan loss provision for the three months ended March 31, 2012 and 2011 (dollars in thousands): |
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| Three Months Ended March 31, | ||||||||||||||||||||||||
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2012 |
2011 |
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| Retail Services | E-Commerce | Total | Retail Services | E-Commerce | Total | |||||||||||||||||||
| Short-term loans | $ | 26,911 | $ | 121,382 | $ | 148,293 | $ | 24,730 | $ | 90,264 | $ | 114,994 | ||||||||||||
| Installment loans | 2,461 | 22,086 | 24,547 | 1,105 | 7,028 | 8,133 | ||||||||||||||||||
| Consumer loan fees | $ | 29,372 | $ | 143,468 | $ | 172,840 | $ | 25,835 | $ | 97,292 | $ | 123,127 | ||||||||||||
| Consumer loan loss provision | 4,466 | 57,917 | 62,383 | 3,183 | 36,317 | 39,500 | ||||||||||||||||||
| Consumer loan fees, net of loss provision | $ | 24,906 | $ | 85,551 | $ | 110,457 | $ | 22,652 | $ | 60,975 | $ | 83,627 | ||||||||||||
| Year-over-year change - $ | $ | 2,254 | $ | 24,576 | $ | 26,830 | $ | (1,906 | ) | $ | 10,984 | $ | 9,078 | |||||||||||
| Year-over-year change - % | 10.0 | % | 40.3 | % | 32.1 | % | 7.8 |
% |
22.0 | % | 12.2 | % | ||||||||||||
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Consumer loan loss provision as a % of consumer loan fees |
15.2 | % | 40.4 | % | 36.1 | % | 12.3 |
% |
37.3 | % | 32.1 | % | ||||||||||||
In addition to providing consumer loans owned by the Company and consumer loans guaranteed by the Company, which are either generally accepted accounting principles (“GAAP”) items or disclosures required by GAAP, the Company has provided combined consumer loans, which is a non-GAAP measure. In addition, the Company has provided disclosure regarding consumer loans written, which is statistical data that is not included in the Company’s financial statements. The Company also provides allowances and liabilities for losses on consumer loans on a combined basis, which are GAAP measures.
Management believes these measures provide investors with important information needed to evaluate the magnitude of potential loan losses and the opportunity for revenue performance of the consumer loan portfolio on an aggregate basis. The comparison of the aggregate amounts from period to period is more meaningful than comparing only the residual amount on the Company’s balance sheet since both revenue and the loss provision for loans are impacted by the aggregate amount of loans owned by the Company and those guaranteed by the Company as reflected in its financial statements.
| CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||||||||||||
| CONSUMER LOAN FINANCIAL AND OPERATING DATA | ||||||||||||||||
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(dollars in thousands, except where otherwise noted) |
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The following tables summarize selected data related to the Company’s consumer loan activities as of March 31, 2012 and 2011 and for the three months ended March 31, 2012 and 2011. |
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| Three Months Ended | ||||||||||||||||
| March 31, | ||||||||||||||||
| 2012 | 2011 | |||||||||||||||
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Combined consumer loan loss provision as a % of combined
consumer loans written(a) |
8.1 | % | 6.2 | % | ||||||||||||
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Charge-offs (net of recoveries) as a % of combined consumer
loans written(a) |
8.8 | % | 7.0 | % | ||||||||||||
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Combined consumer loan loss provision as a % of consumer
loan fees |
36.1 | % | 32.1 | % | ||||||||||||
| (a)The disclosure regarding the amount and number of consumer loans written is statistical data that is not included in the Company’s financial statements. | ||||||||||||||||
| As of March 31, | |||||||||||||||||||||||||
| 2012 | 2011 | ||||||||||||||||||||||||
| Company Owned(a) | Guaranteed by the Company(a) |
Combined(b) |
Company Owned(a) | Guaranteed by the Company(a) | Combined(b) | ||||||||||||||||||||
| Ending consumer loan balances: | |||||||||||||||||||||||||
| Retail Services | |||||||||||||||||||||||||
| Short-term loans | $ | 38,852 | $ | 6,239 | $ | 45,091 | $ | 37,422 | $ | 6,974 | $ | 44,396 | |||||||||||||
| Installment loans | 7,859 | 6,043 | 13,902 | 5,058 | 3,504 | 8,562 | |||||||||||||||||||
| Total Retail Services, gross | 46,711 | 12,282 | 58,993 | 42,480 | 10,478 | 52,958 | |||||||||||||||||||
| E-Commerce | |||||||||||||||||||||||||
| Domestic | |||||||||||||||||||||||||
| Short-term loans | 48,367 | 28,771 | 77,138 | 37,334 | 25,869 | 63,203 | |||||||||||||||||||
| Installment loans | 22,283 | - | 22,283 | 8,783 | - | 8,783 | |||||||||||||||||||
| Total Domestic, gross | 70,650 | 28,771 | 99,421 | 46,117 | 25,869 | 71,986 | |||||||||||||||||||
| Foreign | |||||||||||||||||||||||||
| Short-term loans | 96,714 | 3,450 | 100,164 | 62,974 | 2,403 | 65,377 | |||||||||||||||||||
| Installment loans | 45,003 | - | 45,003 | 9,574 | - | 9,574 | |||||||||||||||||||
| Total Foreign, gross | 141,717 | 3,450 | 145,167 | 72,548 | 2,403 | 74,951 | |||||||||||||||||||
| Total E-Commerce, gross | 212,367 | 32,221 | 244,588 | 118,665 | 28,272 | 146,937 | |||||||||||||||||||
| Total ending loan balance, gross | 259,078 | 44,503 | 303,581 | 161,145 | 38,750 | 199,895 | |||||||||||||||||||
| Less: Allowance and liabilities for losses | (a) | (58,713 | ) | (1,993 | ) | (60,706 | ) | (35,010 | ) | (1,711 | ) | (36,721 | ) | ||||||||||||
| Total ending loan balance, net | $ | 200,365 | $ | 42,510 | $ | 242,875 | $ | 126,135 | $ | 37,039 | $ | 163,174 | |||||||||||||
| (a)GAAP measure. The consumer loan balances guaranteed by the Company represent loans originated by third-party lenders through the Company’s credit services organization programs (the “CSO programs”), which are not recorded in the Company’s financial statements. | |||||||||||||||||||||||||
| (b)Except for allowance and liability for estimated losses, amounts represent non-GAAP measures. | |||||||||||||||||||||||||
| CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES | |||||||||||||||||||
| CONSUMER LOAN FINANCIAL AND OPERATING DATA | |||||||||||||||||||
|
(dollars in thousands, except where otherwise noted) |
|||||||||||||||||||
|
The following table summarizes consumer loans written for the three months ended March 31, 2012 and 2011 (dollars in thousands): |
|||||||||||||||||||
| Three Months Ended March 31, | |||||||||||||||||||
| 2012 | 2011 | ||||||||||||||||||
| Company Owned(a) | Guaranteed by the Company(a)(b) | Combined(a) | Company Owned(a) | Guaranteed by the Company(a)(b) | Combined(a) | ||||||||||||||
| Amount of consumer loans written: | |||||||||||||||||||
| Retail Services | |||||||||||||||||||
| Short-term loans | $ | 175,674 | $ | 37,367 | $ | 213,041 | $ | 158,218 | $ | 41,233 | $ | 199,451 | |||||||
| Installment loans | 1,511 | 1,860 | 3,371 | 2,837 | 1,489 | 4,326 | |||||||||||||
| Total Retail Services | 177,185 | 39,227 | 216,412 | 161,055 | 42,722 | 203,777 | |||||||||||||
| E-Commerce | |||||||||||||||||||
| Domestic | |||||||||||||||||||
| Short-term loans | 100,058 | 162,282 | 262,340 | 102,789 | 155,345 | 258,134 | |||||||||||||
| Installment loans | 11,266 | - | 11,266 | 5,629 | - | 5,629 | |||||||||||||
| Total Domestic | 111,324 | 162,282 | 273,606 | 108,418 | 155,345 | 263,763 | |||||||||||||
| Foreign | |||||||||||||||||||
| Short-term loans | 240,521 | 17,797 | 258,318 | 151,383 | 10,896 | 162,279 | |||||||||||||
| Installment loans | 24,683 | - | 24,683 | 8,954 | - | 8,954 | |||||||||||||
| Total Foreign | 265,204 | 17,797 | 283,001 | 160,337 | 10,896 | 171,233 | |||||||||||||
| Total E-Commerce | 376,528 | 180,079 | 556,607 | 268,755 | 166,241 | 434,996 | |||||||||||||
| Total amount of consumer loans written | $ | 553,713 | $ | 219,306 | $ | 773,019 | $ | 429,810 | $ | 208,963 | $ | 638,773 | |||||||
| Number of consumer loans written: | |||||||||||||||||||
| Retail Services | |||||||||||||||||||
| Short-term loans | 369,384 | 66,731 | 436,115 | 351,271 | 71,176 | 422,447 | |||||||||||||
| Installment loans | 1,537 | 277 | 1,814 | 1,915 | 308 | 2,223 | |||||||||||||
| Total Retail Services | 370,921 | 67,008 | 437,929 | 353,186 | 71,484 | 424,670 | |||||||||||||
| E-Commerce | |||||||||||||||||||
| Domestic | |||||||||||||||||||
| Short-term loans | 316,385 | 219,126 | 535,511 | 303,752 | 215,019 | 518,771 | |||||||||||||
| Installment loans | 10,015 | - | 10,015 | 6,550 | - | 6,550 | |||||||||||||
| Total Domestic | 326,400 | 219,126 | 545,526 | 310,302 | 215,019 | 525,321 | |||||||||||||
| Foreign | |||||||||||||||||||
| Short-term loans | 452,203 | 23,355 | 475,558 | 296,528 | 18,121 | 314,649 | |||||||||||||
| Installment loans | 21,782 | - | 21,782 | 8,144 | - | 8,144 | |||||||||||||
| Total Foreign | 473,985 | 23,355 | 497,340 | 304,672 | 18,121 | 322,793 | |||||||||||||
| Total E-Commerce | 800,385 | 242,481 | 1,042,866 | 614,974 | 233,140 | 848,114 | |||||||||||||
| Total number of consumer loans written | 1,171,306 | 309,489 | 1,480,795 | 968,160 | 304,624 | 1,272,784 | |||||||||||||
| (a)The disclosure regarding the amount and number of consumer loans written is statistical data that is not included in the Company’s financial statements. | |||||||||||||||||||
|
(b)Loans guaranteed by the Company represent loans originated by third-party lenders through the CSO programs. |
|||||||||||||||||||
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
INCOME
FROM OPERATIONS BY OPERATING SEGMENT
(dollars in thousands)
The following tables contain operating segment data for the three months ended March 31, 2012 and 2011 (dollars in thousands).
Corporate operations include corporate expenses, such as personnel, legal, occupancy, and other costs related to corporate service functions, such as executive oversight, insurance and risk management, public and government relations, internal audit, treasury, payroll, compliance and licensing, finance, accounting, tax, certain information systems and collections support and other similar services. Corporate income includes miscellaneous income not directly attributable to the Company’s segments. Corporate assets primarily include: corporate property and equipment, non-qualified savings plan assets, marketable securities, foreign exchange forward contracts and prepaid insurance.
| Retail Services | E-Commerce | ||||||||||||||||||||||||||
| Domestic | Foreign | Total | Domestic | Foreign | Total | Corporate | Consolidated | ||||||||||||||||||||
| Three Months Ended March 31, 2012 | |||||||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||||||
| Pawn loan fees and service charges | $ | 69,413 | $ | 3,486 | $ | 72,899 | $ | - | $ | - | $ | - | $ | - | $ | 72,899 | |||||||||||
| Proceeds from disposition of merchandise | 195,986 | 12,397 | 208,383 | - | - | - | - | 208,383 | |||||||||||||||||||
| Consumer loan fees | 29,372 | - | 29,372 | 69,124 | 74,344 | 143,468 | - | 172,840 | |||||||||||||||||||
| Other | 2,962 | 49 | 3,011 | 165 | (6 | ) | 159 | 196 | 3,366 | ||||||||||||||||||
| Total revenue | 297,733 | 15,932 | 313,665 | 69,289 | 74,338 | 143,627 | 196 | 457,488 | |||||||||||||||||||
| Disposed merchandise | 127,128 | 11,193 | 138,321 | - | - | - | - | 138,321 | |||||||||||||||||||
| Consumer loan loss provision | 4,466 | - | 4,466 | 21,954 | 35,963 | 57,917 | - | 62,383 | |||||||||||||||||||
| Total cost of revenue | 131,594 | 11,193 | 142,787 | 21,954 | 35,963 | 57,917 | - | 200,704 | |||||||||||||||||||
| Net revenue | 166,139 | 4,739 | 170,878 | 47,335 | 38,375 | 85,710 | 196 | 256,784 | |||||||||||||||||||
| Expenses | |||||||||||||||||||||||||||
| Operations and administration | 91,259 | 8,194 | 99,453 | 23,816 | 26,723 | 50,539 | 20,163 | 170,155 | |||||||||||||||||||
| Depreciation and amortization | 7,132 | 1,128 | 8,260 | 2,612 | 263 | 2,875 | 3,486 | 14,621 | |||||||||||||||||||
| Total expenses | 98,391 | 9,322 | 107,713 | 26,428 | 26,986 | 53,414 | 23,649 | 184,776 | |||||||||||||||||||
| Income (loss) from operations | $ | 67,748 | $ | (4,583 | ) | $ | 63,165 | $ | 20,907 | $ | 11,389 | $ | 32,296 | $ | (23,453 | ) | $ | 72,008 | |||||||||
| As of March 31, 2012 | |||||||||||||||||||||||||||
| Total assets | $ | 844,689 | $ | 123,245 | $ | 967,934 | $ | 339,199 | $ | 143,757 | $ | 482,956 | $ | 131,847 | $ | 1,582,737 | |||||||||||
| Goodwill | $ | 357,459 | $ | 210,371 | $ | 567,830 | |||||||||||||||||||||
| Retail Services | E-Commerce | |||||||||||||||||||||||||
| Domestic | Foreign | Total | Domestic | Foreign | Total | Corporate | Consolidated | |||||||||||||||||||
| Three Months Ended March 31, 2011 | ||||||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||
| Pawn loan fees and service charges | $ | 60,226 | $ | 5,056 | $ | 65,282 | $ | - | $ | - | $ | - | $ | - | $ | 65,282 | ||||||||||
| Proceeds from disposition of merchandise | 160,661 | 11,266 | 171,927 | - | - | - | - | 171,927 | ||||||||||||||||||
| Consumer loan fees | 25,835 | - | 25,835 | 58,711 | 38,581 | 97,292 | - | 123,127 | ||||||||||||||||||
| Other | 3,725 | 102 | 3,827 | 233 | 308 | 541 | 160 | 4,528 | ||||||||||||||||||
| Total revenue | 250,447 | 16,424 | 266,871 | 58,944 | 38,889 | 97,833 | 160 | 364,864 | ||||||||||||||||||
| Disposed merchandise | 99,577 | 9,659 | 109,236 | - | - | - | - | 109,236 | ||||||||||||||||||
| Consumer loan loss provision | 3,183 | - | 3,183 | 17,158 | 19,159 | 36,317 | - | 39,500 | ||||||||||||||||||
| Total cost of revenue | 102,760 | 9,659 | 112,419 | 17,158 | 19,159 | 36,317 | - | 148,736 | ||||||||||||||||||
| Net revenue | 147,687 | 6,765 | 154,452 | 41,786 | 19,730 | 61,516 | 160 | 216,128 | ||||||||||||||||||
| Expenses | ||||||||||||||||||||||||||
| Operations and administration | 82,561 | 9,261 | 91,822 | 18,904 | 15,315 | 34,219 | 14,417 | 140,458 | ||||||||||||||||||
| Depreciation and amortization | 6,045 | 1,511 | 7,556 | 2,748 | 192 | 2,940 | 1,946 | 12,442 | ||||||||||||||||||
| Total expenses | 88,606 | 10,772 | 99,378 | 21,652 | 15,507 | 37,159 | 16,363 | 152,900 | ||||||||||||||||||
| Income (loss) from operations | $ | 59,081 | $ | (4,007 | ) | $ | 55,074 | $ | 20,134 | $ | 4,223 | $ | 24,357 | $ | (16,203 | ) | $ | 63,228 | ||||||||
| As of March 31, 2011 | ||||||||||||||||||||||||||
| Total assets | $ | 741,075 | $ | 126,750 | $ | 867,825 | $ | 304,071 | $ | 72,054 | $ | 376,125 | $ | 133,826 | $ | 1,377,776 | ||||||||||
| Goodwill | $ | 335,383 | $ | 210,282 | $ | 545,665 | ||||||||||||||||||||
| CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||||||||
| LOCATION INFORMATION | ||||||||||||
|
Retail Services Segment |
||||||||||||
|
The following table sets forth the number of domestic and foreign Company-owned and franchised locations in the Company’s retail services segment offering pawn lending, consumer lending, and other services as of March 31, 2012 and 2011. The Company’s domestic retail services locations operate under the names “Cash America Pawn,” “SuperPawn,” “Cash America Payday Advance,” “Cashland,” “Pawn X-Change” and “Mr. Payroll.” The Company’s foreign retail services locations (of which the Company is a majority owner) operate under the name “Prenda Fácil.” |
||||||||||||
| As of March 31, | ||||||||||||
| 2012 | 2011 | |||||||||||
| Domestic(a)(b) | Foreign(a) | Total | Domestic(a)(b) | Foreign(a) | Total | |||||||
| Retail services locations offering: | ||||||||||||
| Both pawn and consumer lending | 574 | - | 574 | 569 | - | 569 | ||||||
| Pawn lending only | 127 | 193 | 320 | 124 | 182 | 306 | ||||||
| Consumer lending only | 85 | - | 85 | 88 | - | 88 | ||||||
| Other (c) | 101 | - | 101 | 124 | - | 124 | ||||||
| Total retail services | 887 | 193 | 1,080 | 905 | 182 | 1,087 | ||||||
|
(a)Except as described in (c) below, includes locations that operate in 23 states in the United States as of both March 31, 2012 and 2011, respectively, and 21 jurisdictions in Mexico, as of both March 31, 2012 and 2011, respectively. |
||||||||||||
|
(b)Includes unconsolidated franchised locations as follows: one location operating under the name “Cash America Pawn” as of March 31, 2012 and nine locations operating under the names “Cash America Pawn” and “SuperPawn” as of March 31, 2011. |
||||||||||||
|
(c)As of both March 31, 2012 and 2011, includes six and six consolidated Company-owned check cashing locations, respectively, and 95 and 118 unconsolidated franchised check cashing locations, respectively. As of March 31, 2012 and 2011, includes locations that operate in 16 and 18 states in the United States, respectively. |
||||||||||||
E-Commerce Segment
As of March 31, 2012, the Company’s e-commerce operating segment offers consumer loans to customers over the Internet:
- in the United States at http://www.cashnetusa.com,
- in the United Kingdom at http://www.quickquid.co.uk and http://www.poundstopocket.co.uk
- in Australia at http://www.dollarsdirect.com.au, and
- in Canada at http://www.dollarsdirect.ca.
The following table includes, as of March 31, 2012 and 2011, the number of states in the United States and other foreign countries where the Company’s e-commerce segment operates.
| March 31, 2012 | March 31, 2011 | |||
| United States | 32 | 30 | ||
| United Kingdom |
Y |
Y |
||
| Australia |
Y |
Y |
||
| Canada |
Y |
Y |
||
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NON-GAAP
DISCLOSURE
Non-GAAP Disclosure
In addition to the financial information prepared in conformity with GAAP, the Company provides historical non-GAAP financial information. Management believes that presentation of non-GAAP financial information is meaningful and useful in understanding the activities and business metrics of the Company’s operations. Management believes that these non-GAAP financial measures reflect an additional way of viewing aspects of the Company’s business that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting its business.
Management provides non-GAAP financial information for informational purposes and to enhance understanding of the Company’s GAAP consolidated financial statements. Readers should consider the information in addition to, but not instead of, its financial statements prepared in accordance with GAAP. This non-GAAP financial information may be determined or calculated differently by other companies, limiting the usefulness of those measures for comparative purposes.
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
ADJUSTED
EARNINGS PER SHARE
Adjusted Earnings Per Share
In addition to reporting financial results in accordance with GAAP, the Company has provided adjusted earnings and adjusted earnings per share, which are non-GAAP measures. Management believes that the presentation of these measures provides investors with greater transparency and facilitates comparison of operating results across a broad spectrum of companies with varying capital structures, compensation strategies, derivative instruments and amortization methods, which provides a more complete understanding of the Company’s financial performance, competitive position and prospects for the future. Management also believes that investors regularly rely on non-GAAP financial measures, such as adjusted earnings and adjusted earnings per share, to assess operating performance and that such measures may highlight trends in the Company’s business that may not otherwise be apparent when relying on financial measures calculated in accordance with GAAP. The following table provides a reconciliation between net income attributable to the Company and diluted earnings per share calculated in accordance with GAAP to adjusted earnings and adjusted earnings per share, respectively (dollars in thousands, except per share data):
| Three Months Ended | |||||||||||||
| March 31, | |||||||||||||
| 2012 | 2011 | ||||||||||||
| $ |
Per Diluted Share |
$ |
Per Diluted Share |
||||||||||
|
Net income attributable to Cash America
International, Inc. |
$ | 41,467 | $ | 1.30 | $ | 36,378 | $ | 1.13 | |||||
| Adjustments: | |||||||||||||
| Intangible asset amortization, net of tax | 738 | 0.02 | 1,104 | 0.04 | |||||||||
| Non-cash equity-based compensation, net of tax | 972 | 0.03 | 769 | 0.02 | |||||||||
|
Convertible debt non-cash interest and issuance cost amortization, net of tax |
581 | 0.02 | 541 | 0.02 | |||||||||
| Foreign exchange (gain) loss, net of tax | (54 | ) | - | 60 | - | ||||||||
| Adjusted earnings | $ | 43,704 | $ | 1.37 | $ | 38,852 | $ | 1.21 | |||||
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
ADJUSTED
EBITDA
Adjusted EBITDA
The table below shows adjusted EBITDA, a non-GAAP measure that the Company defines as earnings excluding depreciation, amortization, interest, foreign currency transaction gains or losses, equity in earnings or loss of unconsolidated subsidiary, taxes and including the net income or loss attributable to noncontrolling interests. Management believes adjusted EBITDA is used by investors to analyze operating performance and evaluate the Company’s ability to incur and service debt and its capacity for making capital expenditures. Adjusted EBITDA is also useful to investors to help assess the Company’s liquidity and estimated enterprise value. The computation of adjusted EBITDA as presented below may differ from the computation of similarly-titled measures provided by other companies (dollars in thousands):
| Trailing 12 Months Ended | ||||||||||
| March 31, | ||||||||||
| 2012 | 2011 | |||||||||
|
Net Income attributable to Cash America
International, Inc. |
$ | 141,052 | $ | 119,880 | ||||||
| Adjustments: | ||||||||||
| Depreciation and amortization expenses | 56,328 | 45,651 | ||||||||
| Interest expense, net | 27,005 | 22,157 | ||||||||
| Foreign currency transaction loss | 1,082 | 422 | ||||||||
| Equity in loss of unconsolidated subsidiary | 217 | 140 | ||||||||
| Provision for income taxes | 84,916 | 72,219 | ||||||||
| Net loss attributable to the noncontrolling interest | (1,150 | ) | (903 | ) | ||||||
| Adjusted EBITDA | $ | 309,450 | $ | 259,566 | ||||||
| Adjusted EBITDA margin calculated as follows: | ||||||||||
| Total revenue | $ | 1,675,688 | $ | 1,378,625 | ||||||
| Adjusted EBITDA | 309,450 | 259,566 | ||||||||
| Adjusted EBITDA as a percentage of total revenue | 18.5 | % | 18.8 | % | ||||||
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
SUPPLEMENTAL
INFORMATION
Change in Accounting Policy
In the first quarter of 2012, the Company changed its accounting policy with respect to its foreign pawn operations to reflect nonperforming loans as “Merchandise held for disposition, net”, the proceeds received from the disposition of this merchandise as “Proceeds from disposition of merchandise” and the cost basis as “Cost of disposed merchandise” in its consolidated financial statements.
The following table summarizes the impact of the change in accounting policy on the balance sheets as of March 31, 2011 and December 31, 2011.
| As of March 31, 2011 | As Reported | Adjustment | As Adjusted | |||||||
| Pawn loans | $ | 188,088 | $ | (1,151 | ) | $ | 186,937 | |||
| Merchandise held for disposition, net | 110,490 | 7,294 | 117,784 | |||||||
| Prepaid expenses and other assets | 37,709 | (6,143 | ) | 31,566 | ||||||
| As of December 31, 2011 | As Reported | Adjustment | As Adjusted | |||||||
| Merchandise held for disposition, net | $ | 151,274 | $ | 10,610 | $ | 161,884 | ||||
| Prepaid expenses and other assets | 41,911 | (10,610 | ) | 31,301 | ||||||
The following tables summarize the impact of the change in accounting policy on components of net revenue for each quarter of 2011 and for the year ended December 31, 2011.
| Three Months Ended March 31, 2011 | As Reported | Adjustment | As Adjusted | |||||||
| Revenue | ||||||||||
| Pawn loan fees and service charges | $ | 66,889 | $ | (1,607 | ) | $ | 65,282 | |||
| Proceeds from disposition of merchandise | 160,661 | 11,266 | 171,927 | |||||||
| Consumer loan fees | 123,127 | - | 123,127 | |||||||
| Other | 4,528 | - | 4,528 | |||||||
| Total revenue | 355,205 | 9,659 | 364,864 | |||||||
| Disposed merchandise | 99,577 | 9,659 | 109,236 | |||||||
| Consumer loan loss provision | 39,500 | - | 39,500 | |||||||
| Total cost of revenue | 139,077 | 9,659 | 148,736 | |||||||
| Net revenue | $ | 216,128 | $ | - | $ | 216,128 | ||||
| Three Months Ended June 30, 2011 | As Reported | Adjustment | As Adjusted | |||||||
| Revenue | ||||||||||
| Pawn loan fees and service charges | $ | 68,348 | $ | (1,895 | ) | $ | 66,453 | |||
| Proceeds from disposition of merchandise | 130,293 | 13,582 | 143,875 | |||||||
| Consumer loan fees | 132,414 | - | 132,414 | |||||||
| Other | 3,197 | - | 3,197 | |||||||
| Total revenue | 334,252 | 11,687 | 345,939 | |||||||
| Disposed merchandise | 79,275 | 11,687 | 90,962 | |||||||
| Consumer loan loss provision | 45,129 | - | 45,129 | |||||||
| Total cost of revenue | 124,404 | 11,687 | 136,091 | |||||||
| Net revenue | $ | 209,848 | $ | - | $ | 209,848 | ||||
| Three Months Ended September 30, 2011 | As Reported | Adjustment | As Adjusted | |||||||
| Revenue | ||||||||||
| Pawn loan fees and service charges | $ | 77,053 | $ | (2,654 | ) | $ | 74,399 | |||
| Proceeds from disposition of merchandise | 144,821 | 13,065 | 157,886 | |||||||
| Consumer loan fees | 162,981 | - | 162,981 | |||||||
| Other | 3,038 | - | 3,038 | |||||||
| Total revenue | 387,893 | 10,411 | 398,304 | |||||||
| Disposed merchandise | 91,863 | 10,411 | 102,274 | |||||||
| Consumer loan loss provision | 60,576 | - | 60,576 | |||||||
| Total cost of revenue | 152,439 | 10,411 | 162,850 | |||||||
| Net revenue | $ | 235,454 | $ | - | $ | 235,454 | ||||
| Three Months Ended December 31, 2011 | As Reported | Adjustment | As Adjusted | |||||||
| Revenue | ||||||||||
| Pawn loan fees and service charges | $ | 79,601 | $ | (3,538 | ) | $ | 76,063 | |||
| Proceeds from disposition of merchandise | 200,953 | 14,243 | 215,196 | |||||||
| Consumer loan fees | 180,124 | - | 180,124 | |||||||
| Other | 2,574 | - | 2,574 | |||||||
| Total revenue | 463,252 | 10,705 | 473,957 | |||||||
| Disposed merchandise | 134,440 | 10,705 | 145,145 | |||||||
| Consumer loan loss provision | 80,483 | - | 80,483 | |||||||
| Total cost of revenue | 214,923 | 10,705 | 225,628 | |||||||
| Net revenue | $ | 248,329 | $ | - | $ | 248,329 | ||||
| Year Ended December 31, 2011 | As Reported | Adjustment | As Adjusted | |||||||
| Revenue | ||||||||||
| Pawn loan fees and service charges | $ | 291,891 | $ | (9,694 | ) | $ | 282,197 | |||
| Proceeds from disposition of merchandise | 636,728 | 52,156 | 688,884 | |||||||
| Consumer loan fees | 598,646 | - | 598,646 | |||||||
| Other | 13,337 | - | 13,337 | |||||||
| Total revenue | 1,540,602 | 42,462 | 1,583,064 | |||||||
| Disposed merchandise | 405,155 | 42,462 | 447,617 | |||||||
| Consumer loan loss provision | 225,688 | - | 225,688 | |||||||
| Total cost of revenue | 630,843 | 42,462 | 673,305 | |||||||
| Net revenue | $ | 909,759 | $ | - | $ | 909,759 | ||||
Change in Presentation of Operating Segments
During the first quarter of 2012, the Company changed the presentation of its operating segment information to report corporate operations separately from its retail services and e-commerce segment information. Corporate administrative expense, which was previously allocated to each segment based on personnel expense, is included under the “Corporate” heading in the following tables. For comparison purposes, operations and administration expenses for prior years have been conformed to the current presentation. Corporate operations include corporate expenses, such as personnel, legal, occupancy, and other costs related to corporate service functions, such as executive oversight, insurance and risk management, public and government relations, internal audit, treasury, payroll, compliance and licensing, finance, accounting, tax, certain information systems and collections support and other similar services. Corporate income includes miscellaneous income not directly attributable to the Company’s segments. Corporate assets primarily include: corporate property and equipment, non-qualified savings plan assets, marketable securities, foreign exchange forward contracts and prepaid insurance.
The following tables present operating income for the Company’s segments for each quarter of 2011 and for the year ended December 31, 2011, as a result of the change in presentation described above.
| Retail Services | E-Commerce | |||||||||||||||||||||||||
| Domestic | Foreign | Total | Domestic | Foreign | Total | Corporate | Consolidated | |||||||||||||||||||
| Three Months Ended March 31, 2011 | ||||||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||
| Pawn loan fees and service charges | $ | 60,226 | $ | 5,056 | $ | 65,282 | $ | - | $ | - | $ | - | $ | - | $ | 65,282 | ||||||||||
| Proceeds from disposition of merchandise | 160,661 | 11,266 | 171,927 | - | - | - | - | 171,927 | ||||||||||||||||||
| Consumer loan fees | 25,835 | - | 25,835 | 58,711 | 38,581 | 97,292 | - | 123,127 | ||||||||||||||||||
| Other | 3,725 | 102 | 3,827 | 233 | 308 | 541 | 160 | 4,528 | ||||||||||||||||||
| Total revenue | 250,447 | 16,424 | 266,871 | 58,944 | 38,889 | 97,833 | 160 | 364,864 | ||||||||||||||||||
| Disposed merchandise | 99,577 | 9,659 | 109,236 | - | - | - | - | 109,236 | ||||||||||||||||||
| Consumer loan loss provision | 3,183 | - | 3,183 | 17,158 | 19,159 | 36,317 | - | 39,500 | ||||||||||||||||||
| Total cost of revenue | 102,760 | 9,659 | 112,419 | 17,158 | 19,159 | 36,317 | - | 148,736 | ||||||||||||||||||
| Net revenue | 147,687 | 6,765 | 154,452 | 41,786 | 19,730 | 61,516 | 160 | 216,128 | ||||||||||||||||||
| Expenses | ||||||||||||||||||||||||||
| Operations and administration | 82,561 | 9,261 | 91,822 | 18,904 | 15,315 | 34,219 | 14,417 | 140,458 | ||||||||||||||||||
| Depreciation and amortization | 6,045 | 1,511 | 7,556 | 2,748 | 192 | 2,940 | 1,946 | 12,442 | ||||||||||||||||||
| Total expenses | 88,606 | 10,772 | 99,378 | 21,652 | 15,507 | 37,159 | 16,363 | 152,900 | ||||||||||||||||||
| Income (loss) from operations | $ | 59,081 | $ | (4,007 | ) | $ | 55,074 | $ | 20,134 | $ | 4,223 | $ | 24,357 | $ | (16,203 | ) | $ | 63,228 | ||||||||
| As of March 31, 2011 | ||||||||||||||||||||||||||
| Total assets | $ | 741,075 | $ | 126,750 | $ | 867,825 | $ | 304,071 | $ | 72,054 | $ | 376,125 | $ | 133,826 | $ | 1,377,776 | ||||||||||
| Goodwill | $ | 335,383 | $ | 210,282 | $ | 545,665 | ||||||||||||||||||||
| Retail Services | E-Commerce | |||||||||||||||||||||||
| Domestic | Foreign | Total | Domestic | Foreign | Total | Corporate | Consolidated | |||||||||||||||||
| Three Months Ended June 30, 2011 | ||||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||
| Pawn loan fees and service charges | $ | 61,158 | $ | 5,295 | $ | 66,453 | $ | - | $ | - | $ | - | $ | - | $ | 66,453 | ||||||||
| Proceeds from disposition of merchandise | 130,264 | 13,582 | 143,846 | 29 | - | 29 | - | 143,875 | ||||||||||||||||
| Consumer loan fees | 27,320 | - | 27,320 | 55,212 | 49,882 | 105,094 | - | 132,414 | ||||||||||||||||
| Other | 2,521 | 174 | 2,695 | 110 | 229 | 339 | 163 | 3,197 | ||||||||||||||||
| Total revenue | 221,263 | 19,051 | 240,314 | 55,351 | 50,111 | 105,462 | 163 | 345,939 | ||||||||||||||||
| Disposed merchandise | 79,252 | 11,687 | 90,939 | 23 | - | 23 | - | 90,962 | ||||||||||||||||
| Consumer loan loss provision | 4,756 | - | 4,756 | 16,504 | 23,869 | 40,373 | - | 45,129 | ||||||||||||||||
| Total cost of revenue | 84,008 | 11,687 | 95,695 | 16,527 | 23,869 | 40,396 | - | 136,091 | ||||||||||||||||
| Net revenue | 137,255 | 7,364 | 144,619 | 38,824 | 26,242 | 65,066 | 163 | 209,848 | ||||||||||||||||
| Expenses | ||||||||||||||||||||||||
| Operations and administration | 81,772 | 7,936 | 89,708 | 19,463 | 20,176 | 39,639 | 18,369 | 147,716 | ||||||||||||||||
| Depreciation and amortization | 6,223 | 1,460 | 7,683 | 2,574 | 208 | 2,782 | 1,843 | 12,308 | ||||||||||||||||
| Total expenses | 87,995 | 9,396 | 97,391 | 22,037 | 20,384 | 42,421 | 20,212 | 160,024 | ||||||||||||||||
| Income (loss) from operations | $ | 49,260 | $ | (2,032) | $ | 47,228 | $ | 16,787 | $ | 5,858 | $ | 22,645 | $ | (20,049) | $ | 49,824 | ||||||||
| As of June 30, 2011 | ||||||||||||||||||||||||
| Total assets | $ | 836,555 | $ | 135,852 | $ | 972,407 | $ | 304,586 | $ | 92,342 | $ | 396,928 | $ | 134,902 | $ | 1,504,237 | ||||||||
| Goodwill | $ | 336,392 | $ | 210,282 | $ | 546,674 | ||||||||||||||||||
| Retail Services | E-Commerce | |||||||||||||||||||||||
| Domestic | Foreign | Total | Domestic | Foreign | Total | Corporate | Consolidated | |||||||||||||||||
| Three Months Ended September 30, 2011 | ||||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||
| Pawn loan fees and service charges | $ | 69,025 | $ | 5,374 | $ | 74,399 | $ | - | $ | - | $ | - | $ | - | $ | 74,399 | ||||||||
| Proceeds from disposition of merchandise | 144,820 | 13,065 | 157,885 | 1 | - | 1 | - | 157,886 | ||||||||||||||||
| Consumer loan fees | 32,677 | - | 32,677 | 67,320 | 62,984 | 130,304 | - | 162,981 | ||||||||||||||||
| Other | 2,521 | 16 | 2,537 | 49 | 294 | 343 | 158 | 3,038 | ||||||||||||||||
| Total revenue | 249,043 | 18,455 | 267,498 | 67,370 | 63,278 | 130,648 | 158 | 398,304 | ||||||||||||||||
| Disposed merchandise | 91,863 | 10,411 | 102,274 | - | - | - | - | 102,274 | ||||||||||||||||
| Consumer loan loss provision | 7,513 | - | 7,513 | 25,472 | 27,591 | 53,063 | - | 60,576 | ||||||||||||||||
| Total cost of revenue | 99,376 | 10,411 | 109,787 | 25,472 | 27,591 | 53,063 | - | 162,850 | ||||||||||||||||
| Net revenue | 149,667 | 8,044 | 157,711 | 41,898 | 35,687 | 77,585 | 158 | 235,454 | ||||||||||||||||
| Expenses | ||||||||||||||||||||||||
| Operations and administration | 85,419 | 8,138 | 93,557 | 24,115 | 23,508 | 47,623 | 16,259 | 157,439 | ||||||||||||||||
| Depreciation and amortization | 7,090 | 1,488 | 8,578 | 2,634 | 218 | 2,852 | 3,420 | 14,850 | ||||||||||||||||
| Total expenses | 92,509 | 9,626 | 102,135 | 26,749 | 23,726 | 50,475 | 19,679 | 172,289 | ||||||||||||||||
| Income (loss) from operations | $ | 57,158 | $ | (1,582) | $ | 55,576 | $ | 15,149 | $ | 11,961 | $ | 27,110 | $ | (19,521) | $ | 63,165 | ||||||||
| As of September 30, 2011 | ||||||||||||||||||||||||
| Total assets | $ | 885,572 | $ | 121,326 | $ | 1,006,898 | $ | 323,699 | $ | 115,905 | $ | 439,604 | $ | 131,651 | $ | 1,578,153 | ||||||||
| Goodwill | $ | 327,887 | $ | 210,282 | $ | 538,169 | ||||||||||||||||||
| Retail Services | E-Commerce | |||||||||||||||||||||||
| Domestic | Foreign | Total | Domestic | Foreign | Total | Corporate | Consolidated | |||||||||||||||||
| Three Months Ended December 31, 2011 | ||||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||
| Pawn loan fees and service charges | $ | 71,420 | $ | 4,643 | $ | 76,063 | $ | - | $ | - | $ | - | $ | - | $ | 76,063 | ||||||||
| Proceeds from disposition of merchandise | 200,953 | 14,243 | 215,196 | - | - | - | - | 215,196 | ||||||||||||||||
| Consumer loan fees | 33,360 | - | 33,360 | 72,909 | 73,855 | 146,764 | - | 180,124 | ||||||||||||||||
| Other | 2,402 | 253 | 2,655 | 201 | (545) | (344) | 263 | 2,574 | ||||||||||||||||
| Total revenue | 308,135 | 19,139 | 327,274 | 73,110 | 73,310 | 146,420 | 263 | 473,957 | ||||||||||||||||
| Disposed merchandise | 134,440 | 10,705 | 145,145 | - | - | - | - | 145,145 | ||||||||||||||||
| Consumer loan loss provision | 8,549 | - | 8,549 | 31,401 | 40,533 | 71,934 | - | 80,483 | ||||||||||||||||
| Total cost of revenue | 142,989 | 10,705 | 153,694 | 31,401 | 40,533 | 71,934 | - | 225,628 | ||||||||||||||||
| Net revenue | 165,146 | 8,434 | 173,580 | 41,709 | 32,777 | 74,486 | 263 | 248,329 | ||||||||||||||||
| Expenses | ||||||||||||||||||||||||
| Operations and administration | 89,495 | 8,269 | 97,764 | 26,095 | 25,545 | 51,640 | 16,251 | 165,655 | ||||||||||||||||
| Depreciation and amortization | 6,806 | 1,412 | 8,218 | 2,457 | 232 | 2,689 | 3,642 | 14,549 | ||||||||||||||||
| Total expenses | 96,301 | 9,681 | 105,982 | 28,552 | 25,777 | 54,329 | 19,893 | 180,204 | ||||||||||||||||
| Income (loss) from operations | $ | 68,845 | $ | (1,247) | $ | 67,598 | $ | 13,157 | $ | 7,000 | $ | 20,157 | $ | (19,630) | $ | 68,125 | ||||||||
| As of December 31, 2011 | ||||||||||||||||||||||||
| Total assets | $ | 941,801 | $ | 117,470 | $ | 1,059,271 | $ | 352,244 | $ | 135,774 | $ | 488,018 | $ | 126,960 | $ | 1,674,249 | ||||||||
| Goodwill | $ | 352,439 | $ | 210,282 | $ | 562,721 | ||||||||||||||||||
| Retail Services | E-Commerce | |||||||||||||||||||||||
| Domestic | Foreign | Total | Domestic | Foreign | Total | Corporate | Consolidated | |||||||||||||||||
| Year Ended December 31, 2011 | ||||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||
| Pawn loan fees and service charges | $ | 261,829 | $ | 20,368 | $ | 282,197 | $ | - | $ | - | $ | - | $ | - | $ | 282,197 | ||||||||
| Proceeds from disposition of merchandise | 636,698 | 52,156 | 688,854 | 30 | - | 30 | - | 688,884 | ||||||||||||||||
| Consumer loan fees | 119,192 | - | 119,192 | 254,152 | 225,302 | 479,454 | - | 598,646 | ||||||||||||||||
| Other | 11,170 | 545 | 11,715 | 593 | 286 | 879 | 743 | 13,337 | ||||||||||||||||
| Total revenue | 1,028,889 | 73,069 | 1,101,958 | 254,775 | 225,588 | 480,363 | 743 | 1,583,064 | ||||||||||||||||
| Disposed merchandise | 405,132 | 42,462 | 447,594 | 23 | - | 23 | - | 447,617 | ||||||||||||||||
| Consumer loan loss provision | 24,001 | - | 24,001 | 90,535 | 111,152 | 201,687 | - | 225,688 | ||||||||||||||||
| Total cost of revenue | 429,133 | 42,462 | 471,595 | 90,558 | 111,152 | 201,710 | - | 673,305 | ||||||||||||||||
| Net revenue | 599,756 | 30,607 | 630,363 | 164,217 | 114,436 | 278,653 | 743 | 909,759 | ||||||||||||||||
| Expenses | ||||||||||||||||||||||||
| Operations and administration | 339,247 | 33,604 | 372,851 | 88,577 | 84,544 | 173,121 | 65,296 | 611,268 | ||||||||||||||||
| Depreciation and amortization | 26,165 | 5,871 | 32,036 | 10,413 | 850 | 11,263 | 10,850 | 54,149 | ||||||||||||||||
| Total expenses | 365,412 | 39,475 | 404,887 | 98,990 | 85,394 | 184,384 | 76,146 | 665,417 | ||||||||||||||||
| Income (loss) from operations | $ | 234,344 | $ | (8,868) | $ | 225,476 | $ | 65,227 | $ | 29,042 | $ | 94,269 | $ | (75,403) | $ | 244,342 | ||||||||
CONTACT:
Cash America International, Inc.
Thomas A. Bessant, Jr.,
817-335-1100