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8-K - CASH AMERICA INTERNATIONAL, INC. 8-K - CASH AMERICA INTERNATIONAL INCa50146253.htm

Exhibit 99.1

Cash America Announces Fourth Quarter and Fiscal Year-End Earnings and Declares Dividend

FORT WORTH, Texas--(BUSINESS WIRE)--January 26, 2012--Cash America International, Inc. (NYSE: CSH) reported today that its fourth quarter ended December 31, 2011 net income attributable to the Company increased to $37,827,000 ($1.18 per share) compared to $34,705,000 ($1.10 per share) for the fourth quarter of 2010.

Consolidated total revenue of the Company increased 26% in the fourth quarter of 2011 to $463.3 million, up from $368.8 million for the same period in 2010. 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, 2011 to the same date in 2010, consolidated pawn loan balances were up 16%, domestic pawn loan balances were up 21%, and total combined consumer loan balances, which includes loans extended by the Company directly and loans offered by third parties that the Company guarantees, were up 50%, which led the gain in total revenue during the fourth quarter. Aggregate disposition of merchandise sales rose 24% in the fourth quarter of 2011 compared to the same period in 2010, adding to the top line revenue growth for the period. Consumer loan fees increased 37%, to $180.1 million, in the fourth quarter of 2011 compared to the same period in 2010, as the Company’s E-commerce segment recorded a 44% increase in revenue, led by a 115% increase in revenue from its foreign online lending business.

Net income attributable to the Company increased 9% in the fourth quarter of 2011, to $37.8 million, compared to the same period in 2010. The growth in fourth quarter net income did not fully benefit from the significant increase in revenue as the Company incurred higher operating expenses in its bricks and mortar locations to promote holiday sales and absorbed lower gross profit margins on the disposition of merchandise during the period. In addition, the significant increase in the portfolio of unsecured loans, particularly to non-U.S. customers, led the Company to incur a greater than expected increase in reserves for estimated loan losses during the quarter. Also, included in the results for the fourth quarter of 2011 are approximately $1.4 million ($0.9 million net of taxes, or approximately 3 cents per share) of expense items related to the filing of a Registration Statement on Form S-1 with the Securities and Exchange Commission by the Company’s wholly-owned subsidiary that comprises its E-commerce segment, Enova International, Inc., on September 15, 2011 in connection with a proposed initial public offering of Enova common stock by the Company and Enova, as well as expenses related to acquisition activity during the quarter and legal expenses.

Commenting on the results of the quarter, Daniel R. Feehan, President and Chief Executive Officer of Cash America, said, “We had a successful quarter in terms of revenue growth and asset expansion as we invested in new loan products oriented to meet the needs of our customers. The increase in our consumer loan portfolio generated a significant increase in revenue, although an attributable increase in expenses for marketing and loss reserves reduced a portion of the near term contribution to earnings. We are committed to the growth in these assets as we reach more customers in need of our services. The holiday selling season achieved the sales objectives we expected but with a greater level of pricing discounts than anticipated, which lowered the gross profit margin on our retail sales but positioned our merchandise inventory well as we enter 2012.” Mr. Feehan added, “This was a year of many accomplishments for the Cash America team, highlighted by a record level of total revenue, which reached $1.54 billion, and an all-time high level of earnings after taxes which reached $136 million, up 18% from calendar year 2010.”

Net income attributable to the Company for the twelve months ended December 31, 2011 was $135,963,000 ($4.25 per share) compared to $115,538,000 ($3.67 per share) for the same twelve-month period of 2010. Total revenue for the fiscal year ended December 31, 2011 increased 19% to $1.54 billion, up from $1.29 billion during the same twelve-month period in 2010.

Cash America will conduct a conference call to discuss its fourth quarter earnings on Thursday, January 26, 2012, 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 22, 2012 to shareholders of record on February 8, 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 first quarter and year ending 2012 at this time.

About the Company

As of December 31, 2011, Cash America International, Inc. operated 1,084 total locations offering specialty financial services to consumers, which include 784 lending locations (including one unconsolidated franchised location) operating in 23 states in the United States under the names “Cash America Pawn,” “SuperPawn,” “Maxit,” “Pawn X-Change,” “Cash America Payday Advance,” and “Cashland,” and 190 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 104 unconsolidated franchised and six Company-owned check cashing centers operating in 18 states in the United States under the name “Mr. Payroll” as of December 31, 2011. Additionally, as of December 31, 2011, 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:

http://www.cashamerica.com

 

http://www.dollarsdirect.com.au

http://www.enova.com

http://www.dollarsdirect.ca

http://www.cashnetusa.com

http://www.goldpromise.com

http://www.cashlandloans.com

http://www.mrpayroll.com

http://www.quickquid.co.uk

http://www.primaryinnovations.net

http://www.poundstopocket.co.uk

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This release contains forward-looking statements about the business, financial condition and prospects of Cash America International, Inc. and its subsidiaries (the “Company”). The actual results of the Company could differ materially from those indicated by the forward-looking statements because of various risks and uncertainties including, without limitation, changes in pawn, consumer loan, tax and other domestic and foreign laws and governmental rules and regulations applicable to the Company's business, changes in demand for the Company's services, 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 continued acceptance of the online distribution channel by the Company’s online loan customers, the actions of third parties who provide, acquire or offer products and services to, from or for the Company, fluctuations in the price of gold, changes in competition, the ability of the Company to open new locations or complete acquisitions in accordance with its plans, changes in economic conditions, real estate market fluctuations, interest rate fluctuations, changes in foreign currency exchange rates, 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, the ability to successfully integrate newly acquired businesses into the Company’s operations, the loss of services of any of the Company’s executive officers, a prolonged interruption in the Company’s operations of its facilities, systems and business functions, including its information technology and other business systems, the effect of any current or future litigation proceedings on the Company, 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, risks related to the Company’s previously-announced proposed initial public offering of common stock of its wholly-owned subsidiary, Enova International, Inc. (“Enova”), 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.

The Registration Statement on Form S-1 that was filed with the Securities and Exchange Commission by the Company’s wholly-owned subsidiary, Enova, has not yet become effective. The completion of the offering of common stock of Enova is subject to numerous conditions, including market conditions, and the Company can provide no assurance that it will be successfully completed. The securities 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
(in thousands, except per share data)
(Unaudited)
  Three Months Ended     Year Ended
December 31, December 31,
2011     2010 2011     2010
 
 
Consolidated Operations:
Total revenue $ 463,252 $ 368,831 $ 1,540,602 $ 1,293,339
Net revenue 248,329 211,802 909,759 772,189
Total operating expenses     180,204     150,612   665,417   565,057
 
Income from operations $ 68,125 $ 61,190 $ 244,342 $ 207,132
 
Income before income taxes     60,688     54,925   217,526   184,513
 
Net Income   $ 37,605   $ 34,801 $ 135,166 $ 115,244
 
Net (income) loss attributable to the noncontrolling interest   $ 222   $ (96) $ 797 $ 294
 
Net Income Attributable to Cash America International, Inc.   $ 37,827   $ 34,705 $ 135,963 $ 115,538
 
Earnings per share:
 
Net Income attributable to Cash America International, Inc. common shareholders:
 
Basic $ 1.28 $ 1.17 $ 4.59 $ 3.90
Diluted $ 1.18 $ 1.10 $ 4.25 $ 3.67
 
Weighted average shares:
Basic 29,528 29,759 29,602 29,640
Diluted 32,059 31,655 31,991 31,521

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)
(Unaudited)
 
December 31,
  2011   2010
 
Assets
Current assets:
Cash and cash equivalents $ 62,542 $ 38,324
Pawn loans 253,519 218,408
Consumer loans, net 222,778 139,377
Merchandise held for disposition, net 151,274 124,399
Pawn loan fees and service charges receivable 48,003 41,216
Prepaid expenses and other assets 45,176 32,490
Deferred tax assets   35,065     28,016
Total current assets 818,357 622,230
Property and equipment, net 246,429 222,320
Goodwill 562,721 543,324
Intangible assets, net 34,771 31,188
Other assets   15,236     8,124
Total assets $ 1,677,514   $ 1,427,186
 
Liabilities and Equity
Current liabilities:
Accounts payable and accrued expenses $ 116,378 $ 96,465
Customer deposits 9,935 9,146
Income taxes currently payable 12,880 888
Current portion of long-term debt   34,273     24,433
Total current liabilities 173,466 130,932
Deferred tax liabilities 89,712 56,792
Noncurrent income tax payable 2,315 2,408
Other liabilities 1,413 2,052
Long-term debt   503,018     432,271
Total liabilities $ 769,924   $ 624,455
 
Equity:
Cash America International, Inc. equity:

Common stock, $0.10 par value per share, 80,000,000 shares authorized, 30,235,164 shares issued

3,024 3,024
Additional paid-in capital 167,683 165,658
Retained earnings 776,060 644,208
Accumulated other comprehensive (loss) income (6,896) 4,797
Treasury shares, at cost (1,011,356 shares and 685,315 shares
at December 31, 2011 and 2010, respectively)   (37,419)     (21,283)
Total Cash America International, Inc. shareholders' equity 902,452 796,404
Noncontrolling interest   5,138     6,327
Total equity   907,590     802,731
Total liabilities and equity $ 1,677,514   $ 1,427,186

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

(Unaudited)

 
Three Months Ended Year Ended
December 31, December 31,
2011   2010 2011   2010
(Unaudited)
 
Revenue
Pawn loan fees and service charges $ 79,601 $ 71,558 $ 291,891 $ 253,314
Proceeds from disposition of merchandise 200,953 162,147 636,728 534,878
Consumer loan fees 180,124 131,773 598,646 490,952
Other   2,574     3,353     13,337     14,195
Total Revenue   463,252     368,831     1,540,602     1,293,339
Cost of Revenue
Disposed merchandise 134,440 104,598 405,155 338,756
Consumer loan loss provision   80,483     52,431     225,688     182,394
Total Cost of Revenue   214,923     157,029     630,843     521,150
 
Net Revenue   248,329     211,802     909,759     772,189
Expenses
Operations 133,235 115,355 486,234 419,616
Administration 32,420 22,685 125,034 101,518
Depreciation and amortization   14,549     12,572     54,149     43,923
Total Expenses   180,204     150,612     665,417     565,057
Income from Operations 68,125 61,190 244,342 207,132
Interest expense (7,221) (5,835) (25,528) (22,345)
Interest income 25 8 81 325
Foreign currency transaction loss (207) (363) (1,265) (463)
Equity in loss of unconsolidated subsidiary   (34)     (75)     (104)     (136)
Income before Income Taxes 60,688 54,925 217,526 184,513
Provision for income taxes   23,083     20,124     82,360     69,269
Net Income 37,605 34,801 135,166 115,244
Net loss (income) attributable to the noncontrolling interest   222     (96)     797     294
Net Income Attributable to Cash America International, Inc. $ 37,827   $ 34,705   $ 135,963   $ 115,538
Earnings Per Share:
Net Income attributable to Cash America International, Inc. common shareholders:
Basic $ 1.28 $ 1.17 $ 4.59 $ 3.90
Diluted $ 1.18 $ 1.10 $ 4.25 $ 3.67
Weighted average common shares outstanding:
Basic 29,528 29,759 29,602 29,640
Diluted 32,059 31,655 31,991 31,521
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

(in thousands, except where otherwise noted)

 

 

The following table outlines certain data related to the Company’s pawn loan activities as of and for the three months and years ended December 31, 2011 and 2010.

 
2011 2010
As of December 31: Domestic   Foreign Total Domestic   Foreign Total
Ending pawn loan balances $ 238,399 $ 15,120 $ 253,519 $ 197,301 $ 21,107 $ 218,408
Ending merchandise balance, net $ 151,274 $ - (a) $ 151,274 $ 124,399 $ - (a) $ 124,399
 
Three Months Ended December 31:
Pawn loan fees and service charges $ 71,420 $ 8,181 $ 79,601 $ 62,755 $ 8,803 $ 71,558
Average pawn loan balance outstanding $ 231,424 $ 17,561 $ 248,985 $ 190,642 $ 21,246 $ 211,888
Amount of pawn loans written and renewed $ 227,944 $ 37,266 $ 265,210 $ 197,874 $ 23,348 $ 221,222
Annualized yield on pawn loans 122.4% 116.5% (a) 121.8% 130.6% 126.9% (a) 130.1%
Gross profit margin on disposition of merchandise 33.1% - (a) 33.1% 35.5% - (a) 35.5%
Merchandise turnover 3.3 - (a) 3.3 3.2 - (a) 3.2
 
 
2011 2010
Year Ended December 31: Domestic Foreign Total Domestic Foreign Total
Pawn loan fees and service charges $ 261,829 $ 30,062 $ 291,891 $ 221,335 $ 31,979 $ 253,314
Average pawn loan balance outstanding $ 205,610 $ 20,629 $ 226,239 $ 166,163 $ 22,111 $ 188,274
Amount of pawn loans written and renewed $ 869,203 $ 118,126 $ 987,329 $ 689,476 $ 89,746 $ 779,222
Annualized yield on pawn loans 127.3% 105.2% (a) 124.6% 133.2% 116.4% (a) 130.8%
Gross profit margin on disposition of merchandise 36.4% - (a) 36.4% 36.7% - (a) 36.7%
Merchandise turnover 3.0 - (a) 3.0 3.0 - (a) 3.0
 
(a) With respect to the Company’s foreign pawn operations, the annualized yield on pawn loans is calculated using the average pawn loan balance outstanding in the table above, plus the average collateral underlying unredeemed pawn loans, which is included in “Other assets” in the Company’s consolidated balance sheets, of $10,277 and $6,272 for the three months ended December 31, 2011 and 2010, respectively, and $7,947 and $5,355 for the years ended December 31, 2011 and 2010, respectively. Collateral underlying unredeemed pawn loans will be sold to settle the obligations owed by the customer but are not owned by the Company; therefore, profit on the disposition of this collateral is recorded as pawn loan fees and service charges in the Company’s consolidated statements of operations.

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

MERCHANDISE DISPOSITION, GROSS PROFIT AND INVENTORY OPERATING DATA

(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. 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 and diamonds to refiners, brokers or manufacturers. The following table summarizes the proceeds from the disposition of merchandise and the related profit for the three months and years ended December 31, 2011 and 2010.

Three Months Ended December 31,
2011   2010
       
Retail Commercial Total Retail Commercial Total
Proceeds from disposition $ 100,439 $ 100,514 $ 200,953 $ 91,548 $ 70,599 $ 162,147
Gross profit on disposition $ 36,594 $ 29,919 $ 66,513 $ 35,710 $ 21,839 $ 57,549
Gross profit margin 36.4 % 29.8 % 33.1 % 39.0 % 30.9 % 35.5 %
Percentage of total gross profit 55.0 % 45.0 % 100.0 % 62.1 % 37.9 % 100.0 %
Year Ended December 31,
2011   2010
       
Retail Commercial Total Retail Commercial Total
Proceeds from disposition $ 346,469 $ 290,259 $ 636,728 $ 306,300 $ 228,578 $ 534,878
Gross profit on disposition $ 134,455 $ 97,118 $ 231,573 $ 121,819 $ 74,303 $ 196,122
Gross profit margin 38.8 % 33.5 % 36.4 % 39.8 % 32.5 % 36.7 %
Percentage of total gross profit 58.1 % 41.9 % 100.0 % 62.1 % 37.9 % 100.0 %

The table below summarizes the age of merchandise held for disposition before valuation allowance of $0.7 million at December 31, 2011 and 2010 (dollars in thousands).

       
2011 2010
Balance at December 31, Amount % Amount %
 
Jewelry – held for one year or less $ 94,649 62.3 $ 79,566 63.6
Other merchandise – held for one year or less   50,907   33.5       39,809   31.8
 
Total merchandise held for one year or less   145,556   95.8       119,375   95.4
 
Jewelry – held for more than one year 2,626 1.7 2,685 2.2
Other merchandise – held for more than one year   3,792   2.5       3,039   2.4
 
Total merchandise held for more than one year   6,418   4.2       5,724   4.6
 
Total merchandise held for disposition $ 151,974   100.0     $ 125,099   100.0

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSUMER LOAN FINANCIAL AND OPERATING DATA

(in thousands, except where otherwise noted)

 

 

The following table sets forth consumer loan fees by channel and segment, adjusted for the deduction of the loan loss provision for the three months and years ended December 31, 2011 and 2010 (dollars in thousands):

 
Three Months Ended December 31,
2011   2010
Retail Services   E-Commerce   Total Retail Services   E-Commerce   Total
Short-term loans $ 30,570 $ 127,246 $ 157,816 $ 29,229 $ 95,008 $ 124,237
Installment loans 2,790 19,518 22,308 1,168 4,294 5,462
MLOC   -       -       -       -       2,074       2,074  
Consumer loan fees $ 33,360 $ 146,764 $ 180,124 $ 30,397 $ 101,376 $ 131,773
Consumer loan loss provision   8,549       71,934       80,483       4,466       47,965       52,431  
Consumer loan fees, net of loan loss provision $ 24,811     $ 74,830     $ 99,641     $ 25,931     $ 53,411     $ 79,342  
 
Year-over-year change - $ $ (1,120) $ 21,419 $ 20,299 $ (395) $ 10,174 $ 9,779
Year-over-year change - % (4.3) % 40.1 % 25.6 % (1.5) % 23.5 % 14.1 %
Consumer loan loss provision as a % of

consumer loan fees

  25.6 %     49.0 %     44.7 %     14.7 %     47.3 %     39.8 %
 
Year Ended December 31,
2011 2010
Retail Services E-Commerce Total Retail Services E-Commerce Total
Short-term loans $ 110,071 $ 431,400 $ 541,471 $ 112,679 $ 338,553 $ 451,232
Installment loans 9,121 48,054 57,175 1,294 10,783 12,077
MLOC   -       -       -       -       27,643       27,643  
Consumer loan fees $ 119,192 $ 479,454 $ 598,646 $ 113,973 $ 376,979 $ 490,952
Consumer loan loss provision   24,001       201,687       225,688       17,437       164,957       182,394  
Consumer loan fees, net of loan loss provision $ 95,191     $ 277,767     $ 372,958     $ 96,536     $ 212,022     $ 308,558  
 
Year-over-year change - $ $ (1,345) $ 65,745 $ 64,400 $ 181 $ 67,337 $ 67,518
Year-over-year change - % (1.4) % 31.0 % 20.9 % 0.2 % 46.5 % 28.0 %
Consumer loan loss provision as a % of

consumer loan fees

  20.1 %     42.1 %     37.7 %     15.3 %     43.8 %     37.2 %
 

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

(in thousands, except where otherwise noted)

 

       

The following tables summarize selected data related to the Company’s consumer loan activities as of December 31, 2011 and 2010 and for the three months and years ended December 31, 2011 and 2010.

 
Three Months Ended Year Ended
December 31, December 31,
2011     2010 2011     2010

Combined consumer loan loss provision as a % of combined consumer loans written(a)

 

9.2% 7.1% 7.4% 6.2%

Charge-offs (net of recoveries) as a % of combined consumer loans written(a)

 

7.4% 8.0% 6.6% 5.8%

Combined consumer loan loss provision as a % of consumer loan fees

 

    44.7%     39.8%     37.7%     37.2%
   

(a) Non-GAAP measure.

  As of December 31,
2011   2010
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 $ 53,601 $ 9,237 $ 62,838 $ 49,267 $ 9,819 $ 59,086
Installment loans     9,262     7,425     16,687     2,686     3,800     6,486
Total Retail Services, gross     62,863     16,662     79,525     51,953     13,619     65,572
E-Commerce
Domestic
Short-term loans 60,880 39,341 100,221 52,019 37,082 89,101
Installment loans 24,582 - 24,582 11,023 - 11,023
MLOC     -     -     -     1,510     -     1,510
Total Domestic, gross     85,462     39,341     124,803     64,552     37,082     101,634
 
Foreign
Short-term loans 101,723 3,420 105,143 57,848 1,867 59,715
Installment loans     35,802     -     35,802     3,977     -     3,977
Total Foreign, gross     137,525     3,420     140,945     61,825     1,867     63,692
Total E-Commerce, gross     222,987     42,761     265,748     126,377     38,949     165,326
 
Total ending loan balance, gross 285,850 59,423 345,273 178,330 52,568 230,898
Less: Allowance and liabilities for losses     (63,072)     (3,062)     (66,134)     (38,953)     (2,838)     (41,791)
Total ending loan balance, net   $ 222,778   $ 56,361   $ 279,139   $ 139,377   $ 49,730   $ 189,107

(a)GAAP measure. The consumer loan balances guaranteed by the Company relate to loans originated through the CSO programs and are not recorded in the Company’s financial statements.

(b)Except for allowance and liability for losses, amounts represent non-GAAP measures.


CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSUMER LOAN FINANCIAL AND OPERATING DATA

(in thousands, except where otherwise noted)

 

 

The following table summarizes consumer loans written for the three months and years ended December 31, 2011 and 2010 (dollars in thousands).

 
Three Months Ended December 31,
2011   2010
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 $ 202,782 $ 46,079 $ 248,861 $ 191,663 $ 51,067 $ 242,730
Installment loans     1,676     5,588     7,264     472     5,112     5,584
Total Retail Services     204,458     51,667     256,125     192,135     56,179     248,314
E-Commerce
Domestic
Short-term loans 117,581 189,585 307,166 123,415 184,899 308,314
Installment loans 14,270 - 14,270 10,469 - 10,469
MLOC     -     -     -     14,489     -     14,489
Total Domestic     131,851     189,585     321,436     148,373     184,899     333,272
 
Foreign
Short-term loans 252,334 16,441 268,775 141,556 8,631 150,187
Installment loans     24,510     -     24,510     4,042     -     4,042
Total Foreign     276,844     16,441     293,285     145,598     8,631     154,229
Total E-Commerce     408,695     206,026     614,721     293,971     193,530     487,501
 
Total amount of consumer loans written   $ 613,153   $ 257,693   $ 870,846   $ 486,106   $ 249,709   $ 735,815
 
Number of consumer loans written:
Retail Services
Short-term loans 430,692 82,935 513,627 430,902 89,624 520,526
Installment loans     1,757     824     2,581     1,275     863     2,138
Total Retail Services     432,449     83,759     516,208     432,177     90,487     522,664
E-Commerce
Domestic
Short-term loans 360,255 265,007 625,262 353,031 272,192 625,223
Installment loans 11,521 - 11,521 12,650 - 12,650
MLOC     -     -     -     72,371     -     72,371
Total Domestic     371,776     265,007     636,783     438,052     272,192     710,244
 
Foreign
Short-term loans 465,473 23,557 489,030 272,493 15,446 287,939
Installment loans     21,382     -     21,382     4,885     -     4,885
Total Foreign     486,855     23,557     510,412     277,378     15,446     292,824
Total E-Commerce     858,631     288,564     1,147,195     715,430     287,638     1,003,068
 
Total number of consumer loans written     1,291,080     372,323     1,663,403     1,147,607     378,125     1,525,732

(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 through the CSO programs.


CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSUMER LOAN FINANCIAL AND OPERATING DATA

(in thousands, except where otherwise noted)

 
Year Ended December 31,
2011   2010
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 $ 736,964 $ 174,510 $ 911,474 $ 702,422 $ 199,155 $ 901,577
Installment loans     8,256     15,781     24,037     739     6,905     7,644
Total Retail Services     745,220     190,291     935,511     703,161     206,060     909,221
E-Commerce
Domestic
Short-term loans 433,053 681,009 1,114,062 459,616 782,290 1,241,906
Installment loans 42,532 - 42,532 23,656 - 23,656
MLOC     -     -     -     288,723     -     288,723
Total Domestic     475,585     681,009     1,156,594     771,995     782,290     1,554,285
 
Foreign
Short-term loans 820,841 56,917 877,758 429,853 24,797 454,650
Installment loans     61,307     -     61,307     4,161     -     4,161
Total Foreign     882,148     56,917     939,065     434,014     24,797     458,811
Total E-Commerce     1,357,733     737,926     2,095,659     1,206,009     807,087     2,013,096
 
Total amount of consumer loans written   $ 2,102,953   $ 928,217   $ 3,031,170   $ 1,909,170   $ 1,013,147   $ 2,922,317
 
Number of consumer loans written:
Retail Services
Short-term loans 1,586,551 309,003 1,895,554 1,602,914 347,008 1,949,922
Installment loans     6,858     2,863     9,721     2,034     1,187     3,221
Total Retail Services     1,593,409     311,866     1,905,275     1,604,948     348,195     1,953,143
E-Commerce
Domestic
Short-term loans 1,317,483 958,821 2,276,304 1,284,299 1,135,762 2,420,061
Installment loans 36,151 - 36,151 34,305 - 34,305
MLOC     -     -     -     1,451,330     -     1,451,330
Total Domestic     1,353,634     958,821     2,312,455     2,769,934     1,135,762     3,905,696
 
Foreign
Short-term loans 1,543,453 84,897 1,628,350 865,996 52,460 918,456
Installment loans     53,567     -     53,567     5,018     -     5,018
Total Foreign     1,597,020     84,897     1,681,917     871,014     52,460     923,474
Total E-Commerce     2,950,654     1,043,718     3,994,372     3,640,948     1,188,222     4,829,170
 
Total number of consumer loans written     4,544,063     1,355,584     5,899,647     5,245,896     1,536,417     6,782,313

(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 through the CSO programs.


CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

INCOME FROM OPERATIONS BY OPERATING SEGMENT

(in thousands)

 

               

The Company allocates corporate administrative expenses to each operating segment based on personnel expenses at each segment. In the e-commerce segment, certain administrative expenses are allocated between the domestic and foreign components based on the amount of loans written for each geographic location.

 
Retail Services E-Commerce
Domestic Foreign Total Domestic Foreign Total Consolidated
 
Three Months Ended December 31, 2011
Revenue
Pawn loan fees and service charges $ 71,420 $ 8,181 $ 79,601 $ - $ - $ - $ 79,601
Proceeds from disposition of merchandise 200,953 - 200,953 - - - 200,953
Consumer loan fees 33,360 - 33,360 72,909 73,855 146,764 180,124
Other   2,665     253     2,918     201     (545)     (344)     2,574
Total revenue   308,398     8,434     316,832     73,110     73,310     146,420     463,252
Disposed merchandise 134,440 - 134,440 - - - 134,440
Consumer loan loss provision   8,549     -     8,549     31,401     40,533     71,934     80,483
Total cost of revenue   142,989     -     142,989     31,401     40,533     71,934     214,923
 
Net revenue   165,409     8,434     173,843     41,709     32,777     74,486     248,329
Expenses
Operations 88,571 5,380 93,951 19,710 19,574 39,284 133,235
Administration 12,457 2,889 15,346 10,027 7,047 17,074 32,420
Depreciation and amortization   10,448     1,412     11,860     2,457     232     2,689     14,549
Total expenses   111,476     9,681     121,157     32,194     26,853     59,047     180,204
Income (loss) from operations $ 53,933   $ (1,247)   $ 52,686   $ 9,515   $ 5,924   $ 15,439   $ 68,125
 
As of December 31, 2011
Total assets $ 1,068,761 $ 120,735 $ 1,189,496 $ 352,244 $ 135,774 $ 488,018 $ 1,677,514
Goodwill $ 352,439 $ 210,282 $ 562,721
 
Retail Services E-Commerce
Domestic Foreign Total Domestic Foreign Total Consolidated
 
Three Months Ended December 31, 2010
Revenue
Pawn loan fees and service charges $ 62,755 $ 8,803 $ 71,558 $ - $ - $ - $ 71,558
Proceeds from disposition of merchandise 162,147 - 162,147 - - - 162,147
Consumer loan fees 30,397 - 30,397 67,402 33,974 101,376 131,773
Other   2,647     162     2,809     465     79     544     3,353
Total revenue   257,946     8,965     266,911     67,867     34,053     101,920     368,831
Disposed merchandise 104,598 - 104,598 - - - 104,598
Consumer loan loss provision   4,466     -     4,466     30,934     17,031     47,965     52,431
Total cost of revenue   109,064     -     109,064     30,934     17,031     47,965     157,029
 
Net revenue   148,882     8,965     157,847     36,933     17,022     53,955     211,802
Expenses
Operations 81,829 4,709 86,538 18,421 10,396 28,817 115,355
Administration 9,437 1,795 11,232 8,144 3,309 11,453 22,685
Depreciation and amortization   8,301     1,847     10,148     2,348     76     2,424     12,572
Total expenses   99,567     8,351     107,918     28,913     13,781     42,694     150,612
Income from operations $ 49,315   $ 614   $ 49,929   $ 8,020   $ 3,241   $ 11,261   $ 61,190
 
As of December 31, 2010
Total assets $ 929,696 $ 123,044 $ 1,052,740 $ 312,642 $ 61,804 $ 374,446 $ 1,427,186
Goodwill $ 333,042 $ 210,282 $ 543,324

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

INCOME FROM OPERATIONS BY OPERATING SEGMENT

(in thousands)

             
 
Retail Services E-Commerce
Domestic Foreign Total Domestic Foreign Total Consolidated
 
Year Ended December 31, 2011
Revenue
Pawn loan fees and service charges $ 261,829 $ 30,062 $ 291,891 $ - $ - $ - $ 291,891
Proceeds from disposition of merchandise 636,698 - 636,698 30 - 30 636,728
Consumer loan fees 119,192 - 119,192 254,152 225,302 479,454 598,646
Other   11,913     545     12,458     593     286     879     13,337
Total revenue   1,029,632     30,607     1,060,239     254,775     225,588     480,363     1,540,602
Disposed merchandise 405,132 - 405,132 23 - 23 405,155
Consumer loan loss provision   24,001     -     24,001     90,535     111,152     201,687     225,688
Total cost of revenue   429,133     -     429,133     90,558     111,152     201,710     630,843
 
Net revenue   600,499     30,607     631,106     164,217     114,436     278,653     909,759
Expenses
Operations 335,908 23,012 358,920 64,874 62,440 127,314 486,234
Administration 50,655 10,592 61,247 37,517 26,270 63,787 125,034
Depreciation and amortization   37,015     5,871     42,886     10,413     850     11,263     54,149
Total expenses   423,578     39,475     463,053     112,804     89,560     202,364     665,417
Income (loss) from operations $ 176,921   $ (8,868)   $ 168,053   $ 51,413   $ 24,876   $ 76,289   $ 244,342
 
Retail Services E-Commerce
Domestic Foreign Total Domestic Foreign Total Consolidated
 
Year Ended December 31, 2010
Revenue
Pawn loan fees and service charges $ 221,335 $ 31,979 $ 253,314 $ - $ - $ - $ 253,314
Proceeds from disposition of merchandise 534,878 - 534,878 - - - 534,878
Consumer loan fees 113,973 - 113,973 275,036 101,943 376,979 490,952
Other   12,554     303     12,857     1,259     79     1,338     14,195
Total revenue   882,740     32,282     915,022     276,295     102,022     378,317     1,293,339
Disposed merchandise 338,756 - 338,756 - - - 338,756
Consumer loan loss provision   17,437     -     17,437     116,246     48,711     164,957     182,394
Total cost of revenue   356,193     -     356,193     116,246     48,711     164,957     521,150
 
Net revenue   526,547     32,282     558,829     160,049     53,311     213,360     772,189
Expenses
Operations 301,399 17,195 318,594 68,541 32,481 101,022 419,616
Administration 44,008 8,100 52,108 37,077 12,333 49,410 101,518
Depreciation and amortization   29,839     5,525     35,364     8,283     276     8,559     43,923
Total expenses   375,246     30,820     406,066     113,901     45,090     158,991     565,057
Income from operations $ 151,301   $ 1,462   $ 152,763   $ 46,148   $ 8,221   $ 54,369   $ 207,132

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

LOCATION INFORMATION

 

 

Retail Services Segment

 

 

The following table sets forth the number of domestic and foreign locations in the Company’s retail services segment offering pawn lending, consumer lending, and other services as of December 31, 2011 and 2010. The Company’s domestic retail services locations operate under the names “Cash America Pawn,” “SuperPawn,” “Cash America Payday Advance,” “Cashland,” “Maxit,” “Pawn X-Change” and “Mr. Payroll.” (Maxit and Pawn X-Change were acquired in October 2010.) The Company’s foreign retail services locations (of which the Company is a majority owner) operate under the name “Prenda Fácil.”

 
As of December 31,
2011   2010
Domestic(a)(b) Foreign(a) Total Domestic(a)(b) Foreign(a) Total
Retail services locations offering:

Both pawn and consumer lending

 

572 - 572 567 - 567
Pawn lending only 126 190 316 124 180 304
Consumer lending only 86 - 86 88 - 88
Other (c) 110 - 110   122 - 122
Total retail services 894 190 1,084   901 180 1,081
(a) Except as described in (c) below, includes locations that operate in 23 states in the United States as of both December 31, 2011 and 2010, respectively, and 21 states in Mexico, as of both December 31, 2011 and 2010.
(b) Includes one and nine unconsolidated franchised locations operating under the name “Cash America Pawn” as of December 31, 2011 and 2010, respectively.
(c) As of December 31, 2011 and 2010, includes six consolidated Company-owned check cashing locations and 104 and 116 unconsolidated franchised check cashing locations, respectively. As of December 31, 2011, includes locations that operate in 18 states in the United States.

E-Commerce Segment

As of December 31, 2011, the Company’s e-commerce operating segment offers consumer loans to customers over the Internet:

  • 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.

The e-commerce segment also includes the Company’s MLOC services channel, which processed MLOC advances on behalf of a third-party lender and had a participation interest in MLOC receivables during most of 2010. In the past, the MLOC services channel generated its earnings through loan processing services the Company provided for a third-party lender, as well as from fees generated from participation interests in receivables the Company acquired. This program ended in October 2010 because the third-party lender discontinued offering MLOC advances. The Company intends to continue pursuing the development of new MLOC opportunities during 2012.


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-generally accepted accounting principles, or non-GAAP, financial information is meaningful and useful in understanding the activities and business metrics of the Company’s operations. Management believes that this non-GAAP financial measure reflects an additional way of viewing aspects of the Company’s business that, when viewed with its generally accepted accounting principles, or 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 these measures are useful to help investors better understand the Company’s financial performance, competitive position and prospects for the future.

 

 

These non-GAAP measures are used by management in evaluating the Company’s results of operations and liquidity. The following table provides 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 December 31, Year Ended December 31,
  2011   2010 2011   2010
$   Per

Share

$     Per

Share

$     Per

Share

$     Per

Share

 
As reported net income $ 37,827 $ 1.18 $ 34,705 $ 1.10 $ 135,963 $ 4.25 $ 115,538 $ 3.67
 
Adjustments:
Intangible asset amortization, net of tax 885 0.03 933 0.03 3,905 0.12 2,993 0.09
Non-cash equity-based compensation, net of tax 619 0.02 608 0.02 3,064 0.10 2,384 0.08
Convertible debt non-cash interest and

amortization of issuance costs, net of tax

566 0.02 542 0.01 2,214 0.07 2,088 0.06
Foreign exchange loss, net of tax     128       -     230       0.01     786       0.02     289       0.01
Adjusted earnings   $ 40,025     $ 1.25   $ 37,018     $ 1.17   $ 145,932     $ 4.56   $ 123,292     $ 3.91

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 the noncontrolling interest. 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,
2011 2010
Net Income attributable to Cash America

International, Inc.

$ 135,963 $ 115,538
 
Adjustments:
Depreciation and amortization expenses 54,149 43,923
Interest expense, net 25,447 22,020
Foreign currency transaction loss 1,265 463
Equity in loss of unconsolidated subsidiary 104 136
Provision for income taxes 82,360 69,269
Net loss attributable to the noncontrolling interest       (797)       (294)
Adjusted EBITDA     $ 298,491     $ 251,055
 
Adjusted EBITDA margin calculated as follows:
 
Total revenue $ 1,540,602 $ 1,293,339
 
Adjusted EBITDA 298,491 251,055
                 
Adjusted EBITDA as a percentage of total revenue       19.4%       19.4%

CONTACT:
Cash America International, Inc.
Thomas A. Bessant, Jr., 817-335-1100