SPARTANBURG, S.C., Feb. 19 /PRNewswire-FirstCall/ -- Advance America, Cash Advance Centers, Inc. (NYSE: AEA) today reported the results of its operations for the quarter and year ended December 31, 2008.

For the year ended December 31, 2008, total revenues decreased 4.7% to $676.4 million, compared to $709.6 million for same period in 2007. These comparisons include the results of operations in Pennsylvania and Oregon, states which the Company exited in 2007, as well as operations in Arkansas and New Mexico, states which the Company exited during 2008. Excluding the revenues in these closed states from both years, revenues increased by 0.2% for the year ended December 31, 2008. Total revenues for the quarter ended December 31, 2008 also decreased 4.7% to $175.0 million compared to $183.6 million for the same period in 2007. Excluding the revenues in the closed states from both quarters, revenues decreased by 3.6% for the quarter ended December 31, 2008. For the quarter ended December 31, 2008, total revenues for the centers opened prior to October 1, 2007 and still open as of December 31, 2008 decreased 4.1% compared to the same period in 2007.

The Company previously announced its decision to close its 24 centers in New Hampshire after a new law went into effect on January 1, 2009, imposing a 36% annual rate cap on cash advances, effectively eliminating the product in that state. The Company estimates the cost of the New Hampshire center closings, including an increase in reserves for potential write-offs of receivables the Company is unable to collect, to be approximately $1.2 million, $0.7 million of which was recognized in the fourth quarter.

The provision for doubtful accounts as a percent of total revenues for the year ended December 31, 2008 was 20.1% compared to 19.8% for the same period in 2007. For the quarter ended December 31, 2008, the provision for doubtful accounts as a percentage of total revenues was 24.4% compared to 23.4% for the same period in 2007. Proceeds from the sale of previously written-off customer receivables during the year ended December 31, 2008 totaled approximately $0.6 million, compared to $6.8 million for the same period in 2007. The Company did not sell any previously written-off receivables during the quarter ended December 31, 2008, compared to proceeds of $1.8 million from the sales of previously written-off receivables during the same period in 2007.

Center gross profit for the year ended December 31, 2008 decreased 7.1% to $157.7 million from $169.7 million for the year ended December 31, 2007. For the quarter ended December 31, 2008, center gross profit decreased 1.4% to $38.5 million compared to $39.1 million for the same period in 2007.

On February 9, 2009, the Company announced the settlement of a class action lawsuit in Georgia that resolves all claims against the Company in connection with originating, marketing, or servicing any loan in that state. If approved by the court, the settlement, which does not involve any finding of wrongdoing, will require the Company to make a minimum payment of approximately $2.0 million, up to an aggregate cap of approximately $3.7 million, including attorneys' fees and other costs related to the litigation and settlement administration. The Company reserved approximately $2.0 million for this settlement during the fourth quarter of 2008. This charge is included in general and administrative expenses.

General and administrative expenses for the year ended December 31, 2008 were $70.5 million compared to $59.4 million for the year ended December 31, 2007, an increase of 18.7%. General and administrative expenses for the quarter ended December 31, 2008 were $19.8 million compared to $15.4 million for the same period in 2007, an increase of 28.7%. The increase for both the quarter and full year is due primarily to higher legal and regulatory expenses, including the Georgia lawsuit settlement and higher government affairs expenses, primarily related to ballot initiatives in Arizona and Ohio.

Income before income taxes for the year ended December 31, 2008 decreased 22.5% to $72.0 million from $92.9 million for the year ended December 31, 2007. For the quarter ended December 31, 2008, income before income taxes decreased 22.2% to $14.7 million compared to $18.9 million for the same period in 2007.

For the year ended December 31, 2008, the Company's income tax expense was 46.6% of income before taxes, compared to 40.7% during the same period in 2007.