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8-K - CASH AMERICA INTERNATIONAL, INC. 8-K - CASH AMERICA INTERNATIONAL INC | a50541380.htm |
EX-99.2 - EXHIBIT 99.2 - CASH AMERICA INTERNATIONAL INC | a50541380ex99_2.htm |
Exhibit 99.1
Cash America Announces Fourth Quarter and Fiscal Year-End Earnings and Declares Dividend
FORT WORTH, Texas--(BUSINESS WIRE)--January 24, 2013--Cash America International, Inc. (NYSE: CSH) reported today that its fourth quarter ended December 31, 2012 net income attributable to the Company was $24,480,000 (79 cents per share), which included previously announced charges related to the closure of 115 locations during the quarter in its Mexico based pawn operations of $7.0 million (23 cents per share) and the after tax impact of the Company’s voluntary refund to certain Ohio customers of $8.4 million (27 cents per share) in the period. The combined amount of the Mexico charges and the refund expense amounted to $15.4 million after taxes (50 cents per share). Adding these amounts back to reported net income would result in adjusted earnings, a non-GAAP measure, for the fourth quarter of 2012 of $39,887,000 ($1.29 per share), compared to $37,827,000 ($1.18 per share) for the fourth quarter of 2011. This amount is greater than management’s publicly released earnings per share guidance of between $1.15 per share and $1.25 per share as reported in the Company’s press release dated October 25, 2012 and above analysts’ consensus estimates of $1.20 per share as reported by Thomson Reuters.
Consolidated total revenue of the Company increased 4% in the fourth quarter of 2012 to $491.6 million, up from $474.0 million for the same period in 2011. Revenue from the Company’s loan products, driven by higher loan balances outstanding, contributed the largest portion of the increase for the period. Comparing the ending balance at December 31, 2012 to the same date in 2011, total combined consumer loan balances, a non-GAAP measure, which includes loans extended by the Company directly and loans offered by third parties that the Company guarantees, which are both GAAP measures, were up 27% to $439.8 million, which led to a 24% increase in revenue from consumer loan fees and was the primary driver of the increase in total revenue during the fourth quarter. Aggregate pawn service fees rose 5% in the fourth quarter of 2012 compared to the same period in 2011, adding to the top line revenue growth for the period. Consumer loan fees increased 24%, to $222.9 million, in the fourth quarter of 2012 compared to the same period in 2011, as the Company’s E-commerce segment recorded a 30% increase in revenue, led by a 38% increase in revenue from its domestic online lending business and a 22% increase in revenue from its foreign lending business.
Commenting on the results of the quarter, Daniel R. Feehan, President and Chief Executive Officer of Cash America, said, “We continued to see strong performance out of our E-commerce business in the fourth quarter of 2012 as the higher levels of assets observed in the second and third quarters contributed to earnings growth that exceeded our expectations this period.”
Net income attributable to the Company for the twelve months ended December 31, 2012 was $107,470,000 (3.42 per share) compared to $135,963,000 ($4.25 per share) for the same twelve-month period of 2011. When adding back the unusual items for the full year, which includes $25.4 million (81 cents per share) related to Mexico charges, $8.4 million (27 cents per share) related to the refund expense plus $2.5 million (7 cents per share) related to expenses associated with the July 2012 withdrawal of the Enova International, Inc. proposed initial public offering, adjusted earnings, a non-GAAP measure, would have been $143.8 million and adjusted earnings per share, a non-GAAP measure, would have been $4.57 per share for the twelve-month period ended December 31, 2012, up 8% for the period. Total revenue for the fiscal year ended December 31, 2012 increased 14% to $1.80 billion, up from $1.58 billion during the same twelve-month period in 2011.
Cash America will conduct a conference call to discuss its fourth quarter earnings on Thursday, January 24, 2013, at 7:00 AM CST. 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 February 20, 2013 to shareholders of record on February 6, 2013.
Outlook for the First Quarter of 2013 and the 2013 Fiscal Year
Management believes that the opportunities for sustained growth in revenue and earnings will be largely associated with the customer demand for the credit products provided by the Company, which primarily take the form of pawn loans and consumer loans. Other elements expected to affect the growth in revenue include the potential impact of the regulatory governance of loan products, the reorganization and continued development of the Mexican pawn operations and the development and expansion of the Company’s online distribution channel. First quarter 2013 results could be influenced by the timing of Federal income tax refunds to the Company’s customers. Based on the preceding factors management estimates that the first quarter of fiscal 2013 will be between $1.35 and $1.42 in earnings per share compared to $1.30 in the first quarter of 2012. At this time management confirms its previously reported expectations for its fiscal year 2013 earnings per share to a range of between $4.75 to $5.15 which compares to actual adjusted full year 2012 earnings per share of $4.57 that excludes the after tax impact of unusual items of $35.3 million ($1.15 per share).
About the Company
As of December 31, 2012, Cash America International, Inc. operated 969 total locations offering specialty financial services to consumers, which included the following:
- 831 lending locations in 22 states in the United States primarily under the names “Cash America Pawn,” “SuperPawn,” “Cash America Payday Advance,” and “Cashland;”
- 47 pawn lending locations in central and southern Mexico under the name “Cash America casa de empeño” (previously operated under the name “Prenda Fácil”); and
- 91 check cashing centers (all of which are unconsolidated franchised check cashing centers) operating in 15 states in the United States under the name “Mr. Payroll.”
Additionally, as of December 31, 2012, the Company offered consumer loans over the Internet to customers:
- in 32 states in the United States at http://www.cashnetusa.com and http://www.netcredit.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:
http://www.cashamerica.com |
http://www.poundstopocket.co.uk |
|
http://www.enova.com |
http://www.dollarsdirect.com.au |
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http://www.cashnetusa.com |
http://www.dollarsdirect.ca |
|
http://www.netcredit.com |
http://www.goldpromise.com |
|
http://www.cashlandloans.com |
http://www.mrpayroll.com |
|
http://www.quickquid.co.uk |
http://www.primaryinnovations.net |
Non-GAAP Measures
A reconciliation of adjusted earnings and adjusted earnings per share, which are non-GAAP measures, for the three- and twelve-month periods ended December 31, 2012 discussed above is included in the attachments to this press release. In addition, details regarding combined consumer loan balances as of December 31, 2012 and December 31, 2011 discussed above, which are non-GAAP measures that are comprised of loans extended by the Company directly and loans offered by third parties that the Company guarantees that are both GAAP measures, are included in the attachments to this press release.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This release contains forward-looking statements about the business, financial condition, operations 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 anticipated 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; the reorganization of the Company’s Mexico-based pawn operations; 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 or a deterioration in economic conditions; 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, its products or its 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.
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES | |||||||||||||
HIGHLIGHTS OF CONSOLIDATED RESULTS OF OPERATIONS | |||||||||||||
(dollars in thousands, except per share data) | |||||||||||||
(Unaudited) | |||||||||||||
Three Months Ended | Year Ended | ||||||||||||
December 31, | December 31, | ||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||
Consolidated Operations: | |||||||||||||
Total revenue | $ | 491,604 | $ | 473,957 | $ | 1,800,430 | $ | 1,583,064 | |||||
Net revenue | 267,088 | 248,329 | 1,005,957 | 909,759 | |||||||||
Total expenses | 217,600 | 180,204 | 790,042 | 665,417 | |||||||||
Income from Operations | $ | 49,488 | $ | 68,125 | $ | 215,915 | $ | 244,342 | |||||
Income before income taxes | 41,160 | 60,688 | 186,320 | 217,526 | |||||||||
Net Income | $ | 23,991 | $ | 37,605 | $ | 101,664 | $ | 135,166 | |||||
Net loss attributable to the noncontrolling interest | $ | 489 | $ | 222 | $ | 5,806 | $ | 797 | |||||
Net Income Attributable to Cash America International, Inc. | $ | 24,480 | $ | 37,827 | $ | 107,470 | $ | 135,963 | |||||
Earnings per share: | |||||||||||||
Net Income attributable to Cash America International, Inc.
common shareholders: |
|||||||||||||
Basic | $ | 0.84 | $ | 1.28 | $ | 3.64 | $ | 4.59 | |||||
Diluted | $ | 0.79 | $ | 1.18 | $ | 3.42 | $ | 4.25 | |||||
Weighted average common shares outstanding: | |||||||||||||
Basic | 29,262 | 29,528 | 29,514 | 29,602 | |||||||||
Diluted | 30,884 | 32,059 | 31,452 | 31,991 |
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS |
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(dollars in thousands, except per share data) | |||||
(Unaudited) | |||||
December 31, | |||||
2012 | 2011 | ||||
Assets | |||||
Current assets: | |||||
Cash and cash equivalents | $ | 63,134 | $ | 62,542 | |
Pawn loans | 244,640 | 253,519 | |||
Consumer loans, net | 289,418 | 222,778 | |||
Merchandise held for disposition, net | 167,409 | 161,884 | |||
Pawn loan fees and service charges receivable | 48,991 | 48,003 | |||
Prepaid expenses and other assets | 35,605 | 31,301 | |||
Deferred tax assets | 48,992 | 35,065 | |||
Total current assets | 898,189 | 815,092 | |||
Property and equipment, net | 261,771 | 246,429 | |||
Goodwill | 608,216 | 562,721 | |||
Intangible assets, net | 36,473 | 34,771 | |||
Other assets | 13,609 | 15,236 | |||
Total assets | $ | 1,818,258 | $ | 1,674,249 | |
Liabilities and Equity | |||||
Current liabilities: | |||||
Accounts payable and accrued expenses | $ | 126,664 | $ | 113,113 | |
Customer deposits | 11,420 | 9,935 | |||
Income taxes currently payable | 5,922 | 12,880 | |||
Current portion of long-term debt | 43,617 | 34,273 | |||
Total current liabilities | 187,623 | 170,201 | |||
Deferred tax liabilities | 101,711 | 89,712 | |||
Noncurrent income tax payable | 2,703 | 2,315 | |||
Other liabilities | 888 | 1,413 | |||
Long-term debt | 534,713 | 503,018 | |||
Total liabilities | $ | 827,638 | $ | 766,659 | |
Equity: | |||||
Cash America International, Inc. equity: | |||||
Common stock, $0.10 par value per share, 80,000,000 shares | |||||
authorized, 30,235,164 shares issued and outstanding | 3,024 | 3,024 | |||
Additional paid-in capital | 157,613 | 167,683 | |||
Retained earnings | 879,434 | 776,060 | |||
Accumulated other comprehensive income (loss) | 3,128 | (6,896) | |||
Treasury shares, at cost (1,351,712 shares and 1,011,356 shares | |||||
at December 31, 2012 and 2011, respectively) | (51,304) | (37,419) | |||
Total Cash America International, Inc. shareholders' equity | 991,895 | 902,452 | |||
Noncontrolling interest | (1,275) | 5,138 | |||
Total equity | 990,620 | 907,590 | |||
Total liabilities and equity | $ | 1,818,258 | $ | 1,674,249 |
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (dollars in thousands, except per share data) (Unaudited) |
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Three Months Ended | Year Ended | ||||||||||
December 31, | December 31, | ||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||
(Unaudited) | |||||||||||
Revenue | |||||||||||
Pawn loan fees and service charges | $ | 79,479 | $ | 76,063 | $ | 300,929 | $ | 282,197 | |||
Proceeds from disposition of merchandise | 185,935 | 215,196 | 703,767 | 688,884 | |||||||
Consumer loan fees | 222,864 | 180,124 | 781,520 | 598,646 | |||||||
Other | 3,326 | 2,574 | 14,214 | 13,337 | |||||||
Total Revenue | 491,604 | 473,957 | 1,800,430 | 1,583,064 | |||||||
Cost of Revenue | |||||||||||
Disposed merchandise | 127,301 | 145,145 | 478,179 | 447,617 | |||||||
Consumer loan loss provision | 97,215 | 80,483 | 316,294 | 225,688 | |||||||
Total Cost of Revenue | 224,516 | 225,628 | 794,473 | 673,305 | |||||||
Net Revenue | 267,088 | 248,329 | 1,005,957 | 909,759 | |||||||
Expenses | |||||||||||
Operations and administration | 199,054 | 165,655 | 714,614 | 611,268 | |||||||
Depreciation and amortization | 18,546 | 14,549 | 75,428 | 54,149 | |||||||
Total Expenses | 217,600 | 180,204 | 790,042 | 665,417 | |||||||
Income from Operations | 49,488 | 68,125 | 215,915 | 244,342 | |||||||
Interest expense | (8,066) | (7,221) | (29,131) | (25,528) | |||||||
Interest income | 65 | 25 | 144 | 81 | |||||||
Foreign currency transaction gain (loss) | (241) | (207) | (313) | (1,265) | |||||||
Equity in loss of unconsolidated subsidiary | (86) | (34) | (295) | (104) | |||||||
Income before Income Taxes | 41,160 | 60,688 | 186,320 | 217,526 | |||||||
Provision for income taxes | 17,169 | 23,083 | 84,656 | 82,360 | |||||||
Net Income | 23,991 | 37,605 | 101,664 | 135,166 | |||||||
Net loss attributable to the noncontrolling interest | 489 | 222 | 5,806 | 797 | |||||||
Net Income Attributable to Cash America International, Inc. | $ | 24,480 | $ | 37,827 | $ | 107,470 | $ | 135,963 | |||
Earnings Per Share: | |||||||||||
Net Income attributable to Cash America International, Inc. common shareholders: | |||||||||||
Basic | $ | 0.84 | $ | 1.28 | $ | 3.64 | $ | 4.59 | |||
Diluted | $ | 0.79 | $ | 1.18 | $ | 3.42 | $ | 4.25 | |||
Weighted average common shares outstanding: | |||||||||||
Basic | 29,262 | 29,528 | 29,514 | 29,602 | |||||||
Diluted | 30,884 | 32,059 | 31,452 | 31,991 | |||||||
Dividends declared per common share | $ | 0.035 | $ | 0.035 | $ | 0.140 | $ | 0.140 |
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES PAWN LENDING ACTIVITIES – FINANCIAL AND OPERATING DATA (dollars in thousands, except where otherwise noted)
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The following tables outline certain data related to pawn loan activities of Cash America International, Inc. (the “Company”) as of and for the three months and years ended December 31, 2012 and 2011 (dollars in thousands). |
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2012 | 2011 | |||||||||||||||||
Domestic | Foreign | Total | Domestic | Foreign | Total | |||||||||||||
As of December 31, | ||||||||||||||||||
Ending pawn loan balances | $ | 240,573 | $ | 4,067 | $ | 244,640 | $ | 238,399 | $ | 15,120 | $ | 253,519 | ||||||
Ending merchandise balance, net | $ | 161,655 | $ | 5,754 | $ | 167,409 | $ | 151,274 | $ | 10,610 | $ | 161,884 | ||||||
Three Months Ended December 31, | ||||||||||||||||||
Pawn loan fees and service charges | $ | 77,354 | $ | 2,125 | $ | 79,479 | $ | 71,420 | $ | 4,643 | $ | 76,063 | ||||||
Average pawn loan balance outstanding | $ | 240,545 | $ | 7,775 | $ | 248,320 | $ | 231,424 | $ | 17,561 | $ | 248,985 | ||||||
Amount of pawn loans written and renewed | $ | 241,215 | $ | 8,998 | $ | 250,213 | $ | 227,944 | $ | 37,266 | $ | 265,210 | ||||||
Annualized yield on pawn loans | 127.9% | 108.7% | 127.3% | 122.4% | 104.9% | 121.2% | ||||||||||||
Average amount per pawn loan (in ones) | $ | 133 | $ | 84 | $ | 127 | $ | 134 | $ | 99 | $ | 128 | ||||||
Gross profit margin on disposition of merchandise | 32.6% | 13.5% | 31.5% | 33.1% | 24.8% | 32.6% | ||||||||||||
Merchandise turnover | 2.8 | 4.3 | 2.9 | 3.3 | 4.1 | 3.4 | ||||||||||||
2012 | 2011 | |||||||||||||||||
Year Ended December 31, | Domestic | Foreign | Total | Domestic | Foreign | Total | ||||||||||||
Pawn loan fees and service charges | $ | 288,161 | $ | 12,768 | $ | 300,929 | $ | 261,829 | $ | 20,368 | $ | 282,197 | ||||||
Average pawn loan balance outstanding | $ | 225,066 | $ | 12,055 | $ | 237,121 | $ | 205,610 | $ | 20,037 | $ | 225,647 | ||||||
Amount of pawn loans written and renewed | $ | 916,215 | $ | 60,476 | $ | 976,691 | $ | 869,203 | $ | 118,126 | $ | 987,329 | ||||||
Annualized yield on pawn loans | 128.0% | 105.9% | 126.9% | 127.3% | 101.7% | 125.1% | ||||||||||||
Average amount per pawn loan (in ones) | $ | 131 | $ | 88 | $ | 124 | $ | 127 | $ | 103 | $ | 124 | ||||||
Gross profit margin on disposition of merchandise | 33.5% | 12.0% | 32.1% | 36.4% | 18.6% | 35.0% | ||||||||||||
Merchandise turnover | 2.9 | 3.9 | 3.0 | 3.0 | 5.0 | 3.1 |
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES |
MERCHANDISE DISPOSITION, GROSS PROFIT AND INVENTORY OPERATING DATA |
(dollars in thousands) |
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 purchased merchandise. The following tables summarize the proceeds from the disposition of merchandise and the related profit for the three months and years ended December 31, 2012 and 2011 (dollars in thousands).
Three Months Ended December 31, | ||||||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||||||
Retail | Commercial | Total | Retail | Commercial | Total | |||||||||||||||||||
Proceeds from disposition | $ | 113,964 | $ | 71,971 | $ | 185,935 | $ | 105,423 | $ | 109,773 | $ | 215,196 | ||||||||||||
Gross profit on disposition | $ | 40,625 | $ | 18,009 | $ | 58,634 | $ | 37,712 | $ | 32,339 | $ | 70,051 | ||||||||||||
Gross profit margin | 35.6 | % | 25.0 | % | 31.5 | % | 35.8 | % | 29.5 | % | 32.6 | % | ||||||||||||
Percentage of total gross profit | 69.3 | % | 30.7 | % | 100.0 | % | 53.8 | % | 46.2 | % | 100.0 | % |
Year Ended December 31, | |||||||||||||||||||||||
2012 | 2011 | ||||||||||||||||||||||
Retail | Commercial | Total | Retail | Commercial | Total | ||||||||||||||||||
Proceeds from disposition | $ | 391,566 | $ | 312,201 | $ | 703,767 | $ | 358,695 | $ | 330,189 | $ | 688,884 | |||||||||||
Gross profit on disposition | $ | 144,095 | $ | 81,493 | $ | 225,588 | $ | 137,620 | $ | 103,647 | $ | 241,267 | |||||||||||
Gross profit margin | 36.8 | % | 26.1 | % | 32.1 | % | 38.4 | % | 31.4 | % | 35.0 | % | |||||||||||
Percentage of total gross profit | 63.9 | % | 36.1 | % | 100.0 | % | 57.0 | % | 43.0 | % | 100.0 | % |
The table below summarizes the age of merchandise held for disposition before valuation allowance of $0.8 million and $0.7 million as of December 31, 2012 and 2011 (dollars in thousands).
As of December 31, | |||||||||||
2012 | 2011 | ||||||||||
Amount | % | Amount | % | ||||||||
Jewelry – held for one year or less | $ | 99,489 | 59.0 | $ | 99,683 | 61.3 | |||||
Other merchandise – held for one year or less | 60,344 | 35.8 | 56,483 | 34.8 | |||||||
Total merchandise held for one year or less | 159,833 | 94.8 | 156,166 | 96.1 | |||||||
Jewelry – held for more than one year | 3,283 | 1.9 | 2,626 | 1.6 | |||||||
Other merchandise – held for more than one year | 5,597 | 3.3 | 3,792 | 2.3 | |||||||
Total merchandise held for more than one year | 8,880 | 5.2 | 6,418 | 3.9 | |||||||
Total merchandise held for disposition | $ | 168,713 | 100.0 | $ | 162,584 | 100.0 |
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSUMER LOAN FINANCIAL AND OPERATING DATA (dollars in thousands, except where otherwise noted)
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The following tables set forth consumer loan fees by segment, adjusted for the deduction of the loan loss provision for the three months and years ended December 31, 2012 and 2011 (dollars in thousands). |
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Three Months Ended December 31, | |||||||||||||||||||||||
2012 | 2011 | ||||||||||||||||||||||
Retail Services | E-Commerce | Total | Retail Services | E-Commerce | Total | ||||||||||||||||||
Interest and fees on short-term loans | $ | 28,803 | $ | 120,539 | $ | 149,342 | $ | 30,570 | $ | 117,449 | $ | 148,019 | |||||||||||
Interest and fees on line of credit | - | 27,558 | 27,558 | - | 9,797 | 9,797 | |||||||||||||||||
Interest and fees on installment loans | 3,693 | 42,271 | 45,964 | 2,790 | 19,518 | 22,308 | |||||||||||||||||
Consumer loan fees | $ | 32,496 | $ | 190,368 | $ | 222,864 | $ | 33,360 | $ | 146,764 | $ | 180,124 | |||||||||||
Consumer loan loss provision | 10,095 | 87,120 | 97,215 | 8,549 | 71,934 | 80,483 | |||||||||||||||||
Consumer loan fees, net of loss provision | $ | 22,401 | $ | 103,248 | $ | 125,649 | $ | 24,811 | $ | 74,830 | $ | 99,641 | |||||||||||
Year-over-year change - $ | $ | (2,410) | $ | 28,418 | $ | 26,008 | $ | (1,120) | $ | 21,419 | $ | 20,299 | |||||||||||
Year-over-year change - % | (9.7) | % | 38.0 | % | 26.1 | % | (4.3) | % | 40.1 | % | 25.6 | % | |||||||||||
Consumer loan loss provision as a % of
consumer loan fees |
31.1 | % | 45.8 | % | 43.6 | % | 25.6 | % | 49.0 | % | 44.7 | % | |||||||||||
Year Ended December 31, | |||||||||||||||||||||||
2012 | 2011 | ||||||||||||||||||||||
Retail Services | E-Commerce | Total | Retail Services | E-Commerce | Total | ||||||||||||||||||
Interest and fees on short-term loans | $ | 109,972 | $ | 459,793 | $ | 569,765 | $ | 110,071 | $ | 400,810 | $ | 510,881 | |||||||||||
Interest and fees on line of credit | - | 73,572 | 73,572 | - | 30,590 | 30,590 | |||||||||||||||||
Interest and fees on installment loans | 11,920 | 126,263 | 138,183 | 9,121 | 48,054 | 57,175 | |||||||||||||||||
Consumer loan fees | $ | 121,892 | $ | 659,628 | $ | 781,520 | $ | 119,192 | $ | 479,454 | $ | 598,646 | |||||||||||
Consumer loan loss provision | 29,225 | 287,069 | 316,294 | 24,001 | 201,687 | 225,688 | |||||||||||||||||
Consumer loan fees, net of loss provision | $ | 92,667 | $ | 372,559 | $ | 465,226 | $ | 95,191 | $ | 277,767 | $ | 372,958 | |||||||||||
Year-over-year change - $ | $ | (2,524) | $ | 94,792 | $ | 92,268 | $ | (1,345) | $ | 65,745 | $ | 64,400 | |||||||||||
Year-over-year change - % | (2.7) | % | 34.1 | % | 24.7 | % | (1.4) | % | 31.0 | % | 20.9 | % | |||||||||||
Consumer loan loss provision as a % of consumer loan fees
|
24.0 | % | 43.5 | % | 40.5 | % | 20.1 | % | 42.1 | % | 37.7 | % |
In addition to reporting 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 reported consumer loans written and renewed, which is statistical data that is not included in the Company’s financial statements. The Company also reports allowances and liabilities for estimated losses on consumer loans and on a combined basis, which are GAAP measures that are included in the Company’s financial statements.
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 (dollars in thousands, except where otherwise noted) |
||||||||||||||||
The following tables summarize selected data related to the Company’s consumer loan activities as of and for the three months and years ended December 31, 2012 and 2011. |
||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Combined consumer loan loss provision as a % of combined consumer loans written and renewed(a) |
10.4% | 9.2% | 9.3% | 7.4% | ||||||||||||
Charge-offs (net of recoveries) as a % of combined consumer loans written and renewed(a) |
9.7% | 7.4% | 8.6% | 6.6% | ||||||||||||
Combined consumer loan loss provision as a % of consumer loan fees |
43.6% | 44.7% | 40.5% | 37.7% | ||||||||||||
(a) The disclosure regarding the amount and number of
consumer loans written and renewed is |
As of December 31, | |||||||||||||||||
2012 | 2011 | ||||||||||||||||
Company |
Guaranteed |
Combined(b) |
Company |
Guaranteed |
Combined(b) | ||||||||||||
Ending consumer loan balances: | |||||||||||||||||
Retail Services |
|||||||||||||||||
Short-term loans | $ | 52,171 | $ | 7,134 | $ | 59,305 | $ | 53,601 | $ | 9,237 | $ | 62,838 | |||||
Installment loans | 11,246 | 9,395 | 20,641 | 9,262 | 7,425 | 16,687 | |||||||||||
Total Retail Services, gross | 63,417 | 16,529 | 79,946 | 62,863 | 16,662 | 79,525 | |||||||||||
E-Commerce |
|||||||||||||||||
Domestic | |||||||||||||||||
Short-term loans | 38,227 | 44,261 | 82,488 | 39,232 | 39,341 | 78,573 | |||||||||||
Line of credit | 42,700 | - | 42,700 | 21,648 | - | 21,648 | |||||||||||
Installment loans | 45,996 | - | 45,996 | 24,582 | - | 24,582 | |||||||||||
Total Domestic, gross | 126,923 | 44,261 | 171,184 | 85,462 | 39,341 | 124,803 | |||||||||||
Foreign | |||||||||||||||||
Short-term loans | 108,899 | 3,946 | 112,845 | 101,723 | 3,420 | 105,143 | |||||||||||
Installment loans | 75,882 | - | 75,882 | 35,802 | - | 35,802 | |||||||||||
Total Foreign, gross | 184,781 | 3,946 | 188,727 | 137,525 | 3,420 | 140,945 | |||||||||||
Total E-Commerce, gross | 311,704 | 48,207 | 359,911 | 222,987 | 42,761 | 265,748 | |||||||||||
Total ending loan balance, gross | 375,121 | 64,736 | 439,857 | 285,850 | 59,423 | 345,273 | |||||||||||
Less: Allowance and liabilities for losses | (85,703) | (3,498) | (89,201) | (63,072) | (3,062) | (66,134) | |||||||||||
Total ending loan balance, net | $ | 289,418 | $ | 61,238 | $ | 350,656 | $ | 222,778 | $ | 56,361 | $ | 279,139 | |||||
Allowance and liability for losses as a % of combined consumer loan balances, gross(b) | 22.8% | 5.4% | 20.3% | 22.1% | 5.2% | 19.2% |
(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"), so these balances are not recorded in the Company’s financial statements. However, the Company has established a liability for estimated losses in support of its guarantee of these loans, which is reflected in the table above and included in its 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 tables summarize the consumer loans written and renewed for the three months and years ended December 31, 2012 and 2011 (dollars in thousands). |
||||||||||||||||||
Three Months Ended December 31, | ||||||||||||||||||
2012 | 2011 | |||||||||||||||||
Company |
Guaranteed |
Combined(a) |
Company |
Guaranteed |
Combined(a) | |||||||||||||
Amount of consumer loans written
and renewed: |
||||||||||||||||||
Retail Services |
||||||||||||||||||
Short-term loans | $ | 198,645 | $ | 36,216 | $ | 234,861 | $ | 202,782 | $ | 46,079 | $ | 248,861 | ||||||
Installment loans | 2,033 | 7,289 | 9,322 | 1,676 | 5,588 | 7,264 | ||||||||||||
Total Retail Services | 200,678 | 43,505 | 244,183 | 204,458 | 51,667 | 256,125 | ||||||||||||
E-Commerce |
||||||||||||||||||
Domestic | ||||||||||||||||||
Short-term loans | 83,447 | 206,169 | 289,616 | 97,552 | 189,585 | 287,137 | ||||||||||||
Line of credit | 33,681 | - | 33,681 | 20,029 | - | 20,029 | ||||||||||||
Installment loans | 32,244 | - | 32,244 | 14,270 | - | 14,270 | ||||||||||||
Total Domestic | 149,372 | 206,169 | 355,541 | 131,851 | 189,585 | 321,436 | ||||||||||||
Foreign | ||||||||||||||||||
Short-term loans | 271,652 | 19,868 | 291,520 | 252,334 | 16,441 | 268,775 | ||||||||||||
Installment loans | 41,319 | - | 41,319 | 24,510 | - | 24,510 | ||||||||||||
Total Foreign | 312,971 | 19,868 | 332,839 | 276,844 | 16,441 | 293,285 | ||||||||||||
Total E-Commerce | 462,343 | 226,037 | 688,380 | 408,695 | 206,026 | 614,721 | ||||||||||||
Total amount of consumer loans written and renewed |
$ | 663,021 | $ | 269,542 | $ | 932,563 | $ | 613,153 | $ | 257,693 | $ | 870,846 | ||||||
Number of consumer loans written
and renewed: |
||||||||||||||||||
Retail Services |
||||||||||||||||||
Short-term loans | 414,714 | 68,508 | 483,222 | 430,692 | 82,935 | 513,627 | ||||||||||||
Installment loans | 1,836 | 1,339 | 3,175 | 1,757 | 824 | 2,581 | ||||||||||||
Total Retail Services | 416,550 | 69,847 | 486,397 | 432,449 | 83,759 | 516,208 | ||||||||||||
E-Commerce |
||||||||||||||||||
Domestic | ||||||||||||||||||
Short-term loans | 277,756 | 279,905 | 557,661 | 288,098 | 265,007 | 553,105 | ||||||||||||
Line of credit | 126,292 | - | 126,292 | 72,157 | - | 72,157 | ||||||||||||
Installment loans | 30,017 | - | 30,017 | 11,521 | - | 11,521 | ||||||||||||
Total Domestic | 434,065 | 279,905 | 713,970 | 371,776 | 265,007 | 636,783 | ||||||||||||
Foreign | ||||||||||||||||||
Short-term loans | 455,579 | 25,985 | 481,564 | 465,473 | 23,557 | 489,030 | ||||||||||||
Installment loans | 34,711 | - | 34,711 | 21,382 | - | 21,382 | ||||||||||||
Total Foreign | 490,290 | 25,985 | 516,275 | 486,855 | 23,557 | 510,412 | ||||||||||||
Total E-Commerce | 924,355 | 305,890 | 1,230,245 | 858,631 | 288,564 | 1,147,195 | ||||||||||||
Total number of consumer loans written and renewed |
1,340,905 | 375,737 | 1,716,642 | 1,291,080 | 372,323 | 1,663,403 | ||||||||||||
(a) The disclosure regarding the amount and
number of consumer loans written and renewed is statistical data
that is |
||||||||||||||||||
(b) Loans guaranteed by the Company represent loans originated by third-party lenders through the CSO programs. |
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSUMER LOAN FINANCIAL AND OPERATING DATA (dollars in thousands, except where otherwise noted) |
||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||
Company |
Guaranteed |
Combined(a) |
Company |
Guaranteed |
Combined(a) | |||||||||||||||
Amount of consumer loans written
and renewed: |
||||||||||||||||||||
Retail Services |
||||||||||||||||||||
Short-term loans | $ | 743,575 | $ | 145,221 | $ | 888,796 | $ | 736,964 | $ | 174,510 | $ | 911,474 | ||||||||
Installment loans | 7,723 | 17,902 | 25,625 | 8,256 | 15,781 | 24,037 | ||||||||||||||
Total Retail Services | 751,298 | 163,123 | 914,421 | 745,220 | 190,291 | 935,511 | ||||||||||||||
E-Commerce |
||||||||||||||||||||
Domestic | ||||||||||||||||||||
Short-term loans | 331,754 | 747,533 | 1,079,287 | 376,041 | 681,009 | 1,057,050 | ||||||||||||||
Line of credit | 116,360 | - | 116,360 | 57,012 | - | 57,012 | ||||||||||||||
Installment loans | 89,598 | - | 89,598 | 42,532 | - | 42,532 | ||||||||||||||
Total Domestic | 537,712 | 747,533 | 1,285,245 | 475,585 | 681,009 | 1,156,594 | ||||||||||||||
Foreign | ||||||||||||||||||||
Short-term loans | 1,010,334 | 72,592 | 1,082,926 | 820,841 | 56,917 | 877,758 | ||||||||||||||
Installment loans | 133,109 | - | 133,109 | 61,307 | - | 61,307 | ||||||||||||||
Total Foreign | 1,143,443 | 72,592 | 1,216,035 | 882,148 | 56,917 | 939,065 | ||||||||||||||
Total E-Commerce | 1,681,155 | 820,125 | 2,501,280 | 1,357,733 | 737,926 | 2,095,659 | ||||||||||||||
Total amount of consumer loans written and renewed |
$ | 2,432,453 | $ | 983,248 | $ | 3,415,701 | $ | 2,102,953 | $ | 928,217 | $ | 3,031,170 | ||||||||
Number of consumer loans written
and renewed: |
||||||||||||||||||||
Retail Services |
||||||||||||||||||||
Short-term loans | 1,574,163 | 269,144 | 1,843,307 | 1,586,551 | 309,003 | 1,895,554 | ||||||||||||||
Installment loans | 7,088 | 2,845 | 9,933 | 6,858 | 2,863 | 9,721 | ||||||||||||||
Total Retail Services | 1,581,251 | 271,989 | 1,853,240 | 1,593,409 | 311,866 | 1,905,275 | ||||||||||||||
E-Commerce |
||||||||||||||||||||
Domestic | ||||||||||||||||||||
Short-term loans | 1,062,105 | 1,021,057 | 2,083,162 | 1,115,549 | 958,821 | 2,074,370 | ||||||||||||||
Line of credit | 417,171 | - | 417,171 | 201,934 | - | 201,934 | ||||||||||||||
Installment loans | 87,272 | - | 87,272 | 36,151 | - | 36,151 | ||||||||||||||
Total Domestic | 1,566,548 | 1,021,057 | 2,587,605 | 1,353,634 | 958,821 | 2,312,455 | ||||||||||||||
Foreign | ||||||||||||||||||||
Short-term loans | 1,815,420 | 95,630 | 1,911,050 | 1,543,453 | 84,897 | 1,628,350 | ||||||||||||||
Installment loans | 115,250 | - | 115,250 | 53,567 | - | 53,567 | ||||||||||||||
Total Foreign | 1,930,670 | 95,630 | 2,026,300 | 1,597,020 | 84,897 | 1,681,917 | ||||||||||||||
Total E-Commerce | 3,497,218 | 1,116,687 | 4,613,905 | 2,950,654 | 1,043,718 | 3,994,372 | ||||||||||||||
Total number of consumer loans written and renewed |
5,078,469 | 1,388,676 | 6,467,145 | 4,544,063 | 1,355,584 | 5,899,647 | ||||||||||||||
(a) The disclosure regarding the amount and number of
consumer loans written and renewed is statistical data that |
||||||||||||||||||||
(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 and years ended December 31, 2012 and 2011 (dollars in thousands).
Corporate operations primarily 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 and information systems (except for online lending systems, which are included in the e-commerce segment). Corporate income includes miscellaneous income not directly attributable to the Company’s segments. Corporate assets primarily include: corporate property and equipment, nonqualified 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 December 31, 2012 | ||||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||
Pawn loan fees and service charges | $ | 77,354 | $ | 2,125 | $ | 79,479 | $ | - | $ | - | $ | - | $ | - | $ | 79,479 | ||||||||
Proceeds from disposition of merchandise | 175,546 | 10,389 | 185,935 | - | - | - | - | 185,935 | ||||||||||||||||
Consumer loan fees | 32,496 | - | 32,496 | 100,484 | 89,884 | 190,368 | - | 222,864 | ||||||||||||||||
Other | 1,943 | 697 | 2,640 | 499 | 14 | 513 | 173 | 3,326 | ||||||||||||||||
Total revenue | 287,339 | 13,211 | 300,550 | 100,983 | 89,898 | 190,881 | 173 | 491,604 | ||||||||||||||||
Cost of revenue | ||||||||||||||||||||||||
Disposed merchandise | 118,311 | 8,990 | 127,301 | - | - | - | - | 127,301 | ||||||||||||||||
Consumer loan loss provision | 10,095 | - | 10,095 | 47,532 | 39,588 | 87,120 | - | 97,215 | ||||||||||||||||
Total cost of revenue | 128,406 | 8,990 | 137,396 | 47,532 | 39,588 | 87,120 | - | 224,516 | ||||||||||||||||
Net revenue | 158,933 | 4,221 | 163,154 | 53,451 | 50,310 | 103,761 | 173 | 267,088 | ||||||||||||||||
Expenses | ||||||||||||||||||||||||
Operations and administration | 104,837 | 14,066 | 118,903 | 33,216 | 32,604 | 65,820 | 14,331 | 199,054 | ||||||||||||||||
Depreciation and amortization | 8,524 | 2,121 | 10,645 | 3,611 | 380 | 3,991 | 3,910 | 18,546 | ||||||||||||||||
Total expenses | 113,361 | 16,187 | 129,548 | 36,827 | 32,984 | 69,811 | 18,241 | 217,600 | ||||||||||||||||
Income (loss) from operations | $ | 45,572 | $ | (11,966) | $ | 33,606 | $ | 16,624 | $ | 17,326 | $ | 33,950 | $ | (18,068) | $ | 49,488 | ||||||||
As of December 31, 2012 |
||||||||||||||||||||||||
Total assets | $ | 1,031,431 | $ | 85,607 | $ | 1,117,038 | $ | 391,068 | $ | 179,554 | $ | 570,622 | $ | 130,598 | $ | 1,818,258 | ||||||||
Goodwill | $ | 397,845 | $ | 210,371 | $ | 608,216 |
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 | ||||||||||||||||
Cost of revenue | ||||||||||||||||||||||||
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 |
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES INCOME FROM OPERATIONS BY OPERATING SEGMENT (dollars in thousands) |
||||||||||||||||||||||||
Retail Services | E-Commerce | |||||||||||||||||||||||
Domestic | Foreign | Total | Domestic | Foreign | Total | Corporate | Consolidated | |||||||||||||||||
Year Ended December 31, 2012 | ||||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||
Pawn loan fees and service charges | $ | 288,161 | $ | 12,768 | $ | 300,929 | $ | - | $ | - | $ | - | $ | - | $ | 300,929 | ||||||||
Proceeds from disposition of merchandise | 657,104 | 46,663 | 703,767 | - | - | - | - | 703,767 | ||||||||||||||||
Consumer loan fees | 121,892 | - | 121,892 | 332,752 | 326,876 | 659,628 | - | 781,520 | ||||||||||||||||
Other | 9,028 | 1,209 | 10,237 | 1,326 | 33 | 1,359 | 2,618 | 14,214 | ||||||||||||||||
Total revenue | 1,076,185 | 60,640 | 1,136,825 | 334,078 | 326,909 | 660,987 | 2,618 | 1,800,430 | ||||||||||||||||
Cost of revenue | ||||||||||||||||||||||||
Disposed merchandise | 437,099 | 41,080 | 478,179 | - | - | - | - | 478,179 | ||||||||||||||||
Consumer loan loss provision | 29,225 | - | 29,225 | 143,006 | 144,063 | 287,069 | - | 316,294 | ||||||||||||||||
Total cost of revenue | 466,324 | 41,080 | 507,404 | 143,006 | 144,063 | 287,069 | - | 794,473 | ||||||||||||||||
Net revenue | 609,861 | 19,560 | 629,421 | 191,072 | 182,846 | 373,918 | 2,618 | 1,005,957 | ||||||||||||||||
Expenses | ||||||||||||||||||||||||
Operations and administration | 369,174 | 44,287 | 413,461 | 116,202 | 118,156 | 234,358 | 66,795 | 714,614 | ||||||||||||||||
Depreciation and amortization | 30,978 | 16,634 | 47,612 | 11,987 | 1,285 | 13,272 | 14,544 | 75,428 | ||||||||||||||||
Total expenses | 400,152 | 60,921 | 461,073 | 128,189 | 119,441 | 247,630 | 81,339 | 790,042 | ||||||||||||||||
Income (loss) from operations | $ | 209,709 | $ | (41,361) | $ | 168,348 | $ | 62,883 | $ | 63,405 | $ | 126,288 | $ | (78,721) | $ | 215,915 |
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 | ||||||||||||||||
Cost of revenue | ||||||||||||||||||||||||
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 |
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 December 31, 2012 and 2011. The Company’s domestic retail services locations operate under the names “Cash America Pawn,” “SuperPawn,” “Cash America Payday Advance,” “Cashland” and “Mr. Payroll.” In addition, certain recently acquired domestic retail services locations operate under various names that are expected be changed to “Cash America Pawn” during 2013. The Company’s foreign retail services locations operate under the name “Cash America casa de empeño” (previously operated under the name “Prenda Fácil”).
As of December 31, | ||||||||||||
2012 | 2011 | |||||||||||
Domestic(a) | Foreign | Total | Domestic(a)(b) | Foreign | Total | |||||||
Retail services locations offering: | ||||||||||||
Both pawn and consumer
lending |
581 | - | 581 | 572 | - | 572 | ||||||
Pawn lending only | 167 | 47 | 214 | 126 | 190 | 316 | ||||||
Consumer lending only | 83 | - | 83 | 86 | - | 86 | ||||||
Other (c) | 91 | - | 91 | 110 | - | 110 | ||||||
Total retail services | 922 | 47 | 969 | 894 | 190 | 1,084 |
(a) | Except as described in (c) below, includes locations that operate in 22 and 23 states in the United States as of December 31, 2012 and 2011, respectively. |
(b) | Includes one unconsolidated franchised location operating under the name “Cash America Pawn” at December 31, 2011. |
(c) | As of December 31, 2012 and 2011, includes zero and six consolidated Company-owned check cashing locations, respectively, and 91 and 104 unconsolidated franchised check cashing locations, respectively. As of December 31, 2012 and 2011, includes locations that operate in 15 and 18 states in the United States, respectively. |
E-Commerce Segment
As of December 31, 2012 and 2011, the Company’s e-commerce segment operated in 32 states in the United States and in three other foreign countries:
- in the United States at http://www.cashnetusa.com and http://www.netcredit.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.
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES |
NON-GAAP DISCLOSURE |
ADJUSTED EARNINGS AND ADJUSTED EARNINGS PER SHARE |
Adjusted Earnings and 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. In addition, management believes that the adjustments shown below, especially the adjustments for events that occurred during the three months and year ended December 31, 2012, such as the reorganization of the Company's Mexico-based pawn operations (“Mexico Reorganization”), the withdrawal of the proposed initial public offering of the Company's wholly-owned subsidiary, Enova International, Inc. (“Proposed Enova IPO”), and the charges related to the Company's voluntary reimbursements to Ohio customers (“Ohio Reimbursements”) are useful to investors in order to allow them to compare the Company’s financial results for the current quarter with the previous periods shown.
The following table provides a reconciliation between net income and diluted earnings per share attributable to the Company calculated in accordance with GAAP to adjusted earnings and adjusted earnings per share, respectively, which are shown net of tax (dollars in thousands, except per share data):
Three Months Ended | Year Ended | ||||||||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||||||||||||||||
Net income and diluted earnings per share attributable
to Cash America International, Inc. |
$ | 24,480 | $ | 0.79 | $ | 37,827 | $ | 1.18 | $ | 107,470 | $ | 3.42 | $ | 135,963 | $ | 4.25 | |||||||||||||||
Charges related to withdrawn Proposed Enova IPO(a) | - | - | - | - | 2,424 | 0.07 | - | - | |||||||||||||||||||||||
Charges related to Mexico Reorganization,
net of noncontrolling interest(b) |
6,965 | 0.23 | - | - | 25,421 | 0.81 | - | - | |||||||||||||||||||||||
Charges related to Ohio Reimbursements(c) | 8,442 | 0.27 | - | - | 8,442 | 0.27 | - | - | |||||||||||||||||||||||
Subtotal | 39,887 | 1.29 | 37,827 | 1.18 | 143,757 | 4.57 | 135,963 | 4.25 | |||||||||||||||||||||||
Intangible asset amortization | 740 | 0.03 | 885 | 0.03 | 2,791 | 0.09 | 3,905 | 0.12 | |||||||||||||||||||||||
Non-cash equity-based compensation | 515 | 0.02 | 619 | 0.02 | 3,007 | 0.10 | 3,064 | 0.10 | |||||||||||||||||||||||
Convertible debt non-cash interest and issuance
cost amortization |
612 | 0.02 | 566 | 0.02 | 2,386 | 0.07 | 2,214 | 0.07 | |||||||||||||||||||||||
Foreign currency transaction (gain) loss | 151 | - | 128 | - | 196 | 0.01 | 786 | 0.02 | |||||||||||||||||||||||
Adjusted earnings and adjusted earnings per share | $ | 41,905 | 1.36 | $ | 40,025 | $ | 1.25 | $ | 152,137 | $ | 4.84 | $ | 145,932 | $ | 4.56 |
(a) |
Represents charges directly related to the Proposed Enova IPO that was withdrawn in July 2012. For the year ended December 31, 2012, represents $3.9 million of charges, net tax benefit of $1.5 million. |
|
(b) |
Represents charges related to the Mexico Reorganization. For the three months ended December 31, 2012, represents $7.0 million of charges. For the year ended December 31, 2012, represents $28.9 million of charges, net tax benefit of $1.2 million and noncontrolling interest of $2.3 million. |
|
(c) |
Represents charges related to the Ohio Reimbursements. For the three months and year ended December 31, 2012, represents $13.4 million of charges, net tax benefit of $5.0 million. |
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES |
NON-GAAP DISCLOSURE |
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):
Year Ended December 31, | ||||||||
2012 | 2011 | |||||||
Net income attributable to Cash America International, Inc. | $ | 107,470 | $ | 135,963 | ||||
Adjustments: | ||||||||
Depreciation and amortization expenses | 75,428 | 54,149 | ||||||
Interest expense, net | 28,987 | 25,447 | ||||||
Foreign currency transaction loss | 313 | 1,265 | ||||||
Equity in loss of unconsolidated subsidiary | 295 | 104 | ||||||
Provision for income taxes | 84,656 | 82,360 | ||||||
Net loss attributable to the noncontrolling interest | (5,806) | (797) | ||||||
Adjusted EBITDA | $ | 291,343 | $ | 298,491 | ||||
Adjusted EBITDA margin calculated as follows: | ||||||||
Total revenue | $ | 1,800,430 | $ | 1,583,064 | ||||
Adjusted EBITDA | 291,343 | 298,491 | ||||||
Adjusted EBITDA as a percentage of total revenue | 16.2% | 18.9% |
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 or superior to, 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.
CONTACT:
Cash America International, Inc.
Thomas A. Bessant, Jr.,
817-335-1100