(Source: Business Wire)
Cash America International, Inc. (NYSE: CSH) announced today that net income for the first quarter ended March 31, 2009 was $23,911,000 (79 cents per share) compared to net income of $25,811,000 (86 cents per share) for the same period in 2008. Earnings per share for the first three months of 2009 exceeded management's updated guidance of 76 to 78 cents per share as discussed in the Company's press release dated April 9, 2009 and even though earnings ended down 7% year over year, they are significantly better than management's initial expectation published in January 2009 of down 25%. Increased total revenue, led by better than expected results from pawn lending operations and prolonged availability of certain online cash advance markets contributed to the higher than expected first quarter results. In addition, earnings in the first quarter of 2009 benefited from an improvement in loss rates related to the Company's short-term cash advance product that led to a decrease in the provision for loan losses in the period compared to the same period in 2008.
Total revenue increased 7% to $268.1 million for the three-month period ended March 31, 2009 compared to $250.9 million in the year ago period. Revenue from the Company's pawn segment, which includes finance and service charges on pawn loans and proceeds from the sale of merchandise, increased 14% to $182.7 million from $160.0 million in year-over-year first quarter comparisons. This was partially offset by a decline in the total revenue from the Company's cash advance segment, which posted a 6% decrease in total revenue to $80.3 million during the first three months of 2009 compared to $85.5 million in the same period in 2008. The decline in revenue in the cash advance segment was largely attributable to operations in states impacted by changes in the regulatory environment late in 2008.
Commenting on the first quarter results, Daniel R. Feehan, President and Chief Executive Officer of Cash America said, "The first quarter results were above our initial expectations due to the strong contribution of both our U.S. and Mexico based pawn operations and the unexpected continuation of our online cash advance offering in certain states. Revenue from pawn loans was up 22% because of the higher balances outstanding and portfolio performance, which led the greater earnings results in this segment. As we expected, revenue and earnings from our cash advance segment were adversely affected by rule changes to our cash advance product offering in Ohio and Florida and to a lesser extent in Pennsylvania. The first quarter of 2009 has been a period of significant adjustment which we have handled better than we expected."
Cash America will host a conference call to discuss the first quarter results on Thursday, April 23rd at 7:45 AM CDT. A live web cast of the call will be available on the Investor Relations section of the Company's corporate web site (www.cashamerica.com). To listen to the live call, please go to the web site at least fifteen minutes early to register, download, and install any necessary audio software. A replay will be available on the Company's web site for 90 days following the conference call.
Additionally, the Company announced that the Board of Directors, at its regularly scheduled quarterly meeting, declared a $0.035 (3.5 cents) per share cash dividend on common shares outstanding. The dividend will be paid at the close of business on May 20, 2009 to shareholders of record on May 6, 2009.
Outlook for the Second Quarter of 2009 and the 2009 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 take the form of pawn loans and short-term cash advances. Other elements expected to affect the growth in revenue include the potential impact of the regulatory governance of loan products, the continued growth and development of the Mexican pawn operations and the development and expansion of the Company's online and card based distribution channels for its cash advance products. The impact of regulatory changes in our Ohio storefront locations and the anticipated decrease in customers in Pennsylvania and Minnesota in the online channel will cause revenue and earnings for the cash advance segment to be down in the second quarter. In addition, the absence of Federal Stimulus Payments will likely cause revenue and earnings from U.S. pawn operations to be below the prior year. However, management believes the anniversary revenue challenges discussed for the first half of 2009 could begin to improve in the second half of the year if loan demand firms for both pawn and cash advance products. While the Company intends to maintain its current underwriting standards, higher loan demand for the cash advance product could lead to higher loan losses associated with the difficult consumer economic environment. Based on its views and on the preceding factors, management expects that the second quarter 2009 earnings per share will be between 50 and 53 cents per share compared to 67 cents per share in the second quarter 2008. Management estimates that for the full year 2009 earnings per share will be between $3.10 and $3.30 per share compared to $2.70 per share in fiscal 2008.
Cash America International, Inc. is a provider of specialty financial services to individuals in the United States with 1,004 total locations as of March 31, 2009. Cash America is the largest provider of secured non-recourse loans to individuals, commonly referred to as pawn loans, through 628 total pawn locations, comprised, in part, of 501 in 22 states under the brand names Cash America Pawn and SuperPawn. In addition, Cash America is the majority owner of 127 pawn lending locations in Mexico that operate under the name of Prenda Fácil. The Company also offers short-term cash advances in many of its locations including 248 locations that offer this service under the brand names Cash America Payday Advance and Cashland. Short-term cash advances are also offered over the Internet to customers in 32 states in the United States and in the United Kingdom at http://www.cashnetusa.com and http://www.quickquid.co.uk, respectively. In addition, check cashing services are provided through its 128 franchised and Company-owned "Mr. Payroll" check cashing centers.
For additional information regarding the Company and the services it provides, visit the Company's websites located at:
http://www.cashamerica.com http://www.cashnetusa.com
http://www.cashlandloans.com http://www.quickquid.co.uk
http://www.strikegoldnow.com
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 consumer credit, tax and other laws and government rules and regulations applicable to the Company's business, changes in demand for the Company's services, the continued acceptance of the online distribution channel by the Company's cash advance customers, the actions of third parties who offer products and services at the Company's locations, changes in tax and other laws and governmental rules and regulations applicable to the Company's business, fluctuations in the price of gold, changes in competition, the ability of the Company to open new operating units in accordance with its plans, economic conditions, real estate market fluctuations, interest rate fluctuations, changes in foreign currency exchange rates, changes in the capital markets, the ability to successfully integrate newly acquired businesses into the Company's operations and other risks indicated in the Company's filings with the Securities and Exchange Commission. These risks and uncertainties are beyond the ability of the Company to control, nor can the Company predict all of the risks and uncertainties that could cause its actual results to differ materially from those indicated by the forward-looking statements. When used in this release, terms such as "believes," "estimates," "should," "could" "plans," "expects," "anticipates" and similar expressions or 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 (in thousands, except per share data) Three Months Ended March 31, 2009 2008 Consolidated Operations: Total revenue $ 268,092 $ 250,934 Net revenue 185,590 179,418 Total operating expenses 142,111 134,946 Income from operations $ 43,479 $ 44,472 Income before income taxes 38,289 40,990 Net Income $ 24,226 $ 25,811 Less: Net income attributable to the noncontrolling interest (315 ) - Net Income Attributable to Cash America International, Inc. $ 23,911 $ 25,811 Earnings per share: Net Income attributable to Cash America International, Inc. common stockholders: Basic $ 0.80 $ 0.88 Diluted $ 0.79 $ 0.86 Weighted average shares: Basic 29,770 29,376 Diluted 30,419 29,995 -------------------------------------------------------------------------------
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share data) March 31, December 31, 2009 2008 2008 (Unaudited) Assets Current assets: Cash and cash equivalents $ 25,676 $ 22,637 $ 30,005 Pawn loans 148,147 124,775 168,747 Cash advances, net 75,880 74,179 83,850 Merchandise held for disposition, net 99,516 93,027 109,493 Finance and service charges receivable 28,709 24,496 33,063 Income taxes recoverable - - 2,606 Other receivables and prepaid expenses 19,028 17,944 15,480 Deferred tax assets 19,301 19,198 22,037 Total current assets 416,257 376,256 465,281 Property and equipment, net 186,622 168,586 185,887 Goodwill 489,779 347,434 494,192 Intangible assets, net 31,456 22,424 35,428 Other assets 5,498 5,185 5,722 Total assets $ 1,129,612 $ 919,885 $ 1,186,510 Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued expenses $ 69,288 $ 60,921 $ 79,759 Accrued supplemental acquisition payment 7,700 63,213 47,064 Customer deposits 10,133 8,682 8,814 Income taxes currently payable 3,687 12,196 - Current portion of long-term debt 18,714 8,500 15,810 Total current liabilities 109,522 153,512 151,447 Deferred tax liabilities 31,042 20,482 27,575 Noncurrent income tax payable 2,968 - 3,050 Other liabilities 3,942 1,806 2,359 Long-term debt 380,902 224,970 422,344 Total liabilities 528,376 400,770 606,775 Stockholders' equity: Cash America International, Inc.
