(Source: Business Wire)
Cash America International, Inc. (NYSE: CSH) reported that its net income for the second quarter ended June 30, 2009 was $16,607,000 (54 cents per share) and that it exceeded the top of its previously released expectations of its earnings per share for the second quarter of 2009. Lower losses on cash advance loans and rising pawn loan demand led to the improvement in earnings compared to expectations. Management had also projected that its earnings in the second quarter of 2009 would be below the prior year primarily due to regulatory changes impacting earnings in certain cash advance markets which contributed significant earnings in the prior year and because many of the Company's customers would be without the economic stimulus checks issued by the Federal Government in the second quarter of 2008. The second quarter 2008 earnings were $20,137,000 (67 cents per share).
Total revenue during the second quarter of 2009 was $252.4 million, up slightly from $248.0 million in the second quarter of 2008, due to a 25% increase in finance and service charges on pawn loan balances year over year which offset lower levels of cash advance fees compared to the second quarter of 2008. Although revenue from merchandise disposition activities in the second quarter of 2009 achieved a nominal increase over the second quarter of 2008, lower gross profit margins contributed to a slight decrease in consolidated net revenue, which was consistent with expectations.
Commenting on the results of the quarter, Daniel R. Feehan, President and Chief Executive Officer of Cash America said, "The recovery of pawn loan balances during the second quarter contributed to the Company exceeding our initial expectations. In addition, our efforts to moderate bad debt expense through more careful underwriting instituted late in 2008 led to lower losses on loans in our cash advance portfolio through the first half of fiscal 2009. Both of these factors are positive elements as we enter the final six months of 2009. We are also encouraged by increases in loan volume in our storefront cash advance business which has been challenged by lower yields due to regulatory changes in 2008 and 2009. It appears that we will have the opportunity to benefit from sustained loan demand to contribute to a successful second half of the year."
For the first six months of fiscal year 2009, total revenue increased 4% to $520.5 million compared to $498.9 million for the same period in 2008. Cash America posted net income of $40,518,000 ($1.33 per share) for the first six months of fiscal year 2009 compared to $45,948,000 ($1.53 per share) for the same period in 2008.
Cash America will host a conference call to discuss the second quarter results on Thursday, July 23, 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 (http://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 stock outstanding. The dividend will be paid at the close of business on August 19, 2009 to shareholders of record on August 5, 2009.
Outlook for the Third Quarter of 2009 and Related Fiscal Year
Management believes that the opportunities for 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, and consumer spending on retail sales of unredeemed collateral. Other elements expected to affect the growth in revenue include the regulatory governance of loan products and the development and growth of new markets for the Company's online distribution channel for cash advance products, as well as the continued growth of its pawn operations in Mexico. As the Company enters the third quarter of 2009, management anticipates that demand for the Company's lending products will continue to be strong. Management believes that the revenue challenges facing the cash advance product, including the regulatory changes impacting markets that were profitable in 2008, such as Pennsylvania, Florida, Minnesota and Ohio, will become less of a factor in year over year comparisons in the second half of the year if loan demand increases for the cash advance product. Based on its views and on the preceding factors management expects the third quarter 2009 net income per share to be between 70 and 75 cents per share compared to 63 cents per share in the third quarter of 2008. In addition, management has decided to modify its full year 2009 estimates to a range of between $3.00 and $3.15 per share, compared to $2.70 per share in fiscal 2008.
About the Company
As of June 30, 2009, Cash America International, Inc. had 1,023 total locations offering specialty financial services to consumers, including 647 pawn lending locations (including 15 unconsolidated franchised units), consisting of 501 locations operating in 22 states in the United States under the names Cash America Pawn and SuperPawn, and 146 pawn lending locations, of which the Company is a majority owner, operating in 18 jurisdictions in central and southern Mexico under the name "Prenda Fácil." In addition, the Company owns 248 cash advance storefront locations operating in six states in the United States under the names Cash America Payday Advance and Cashland, and 123 franchised and five company-owned check cashing centers operating in 16 states in the United States under the name "Mr. Payroll." Additionally, as of June 30, 2009, the Company offered short-term cash advances over the Internet to customers in 32 states in the United States at http://www.cashnetusa.com, as well as in the United Kingdom at http://www.quickquid.co.uk and in Australia at http://www.dollarsdirect.com.au. The Company also owns a card services business that processes cash advances on behalf of a third-party lender with balances outstanding in all 50 states and two other jurisdictions in the United States.
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.quickquid.co.uk http://www.dollarsdirect.com.au http://www.strikegoldnow.com http://www.cashlandloans.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 pawn, consumer credit, tax and other laws and governmental 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 to or for the Company, 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, the loss of services of any of our executive officers, the effect of any current or future litigation proceedings on the Company, the effect of any of such changes on the Company's business or the markets in which we operate 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 (in thousands, except per share data) Three Months Ended Six Months Ended June 30, June 30, 2009 2008 2009 2008 Consolidated Operations: Total revenue $ 252,381 $ 247,979 $ 520,473 $ 498,913 Net revenue 180,847 181,238 366,437 360,656 Total operating expenses 148,647 145,344 290,758 280,290 Income from operations $ 32,200 $ 35,894 $ 75,679 $ 80,366 Income before income taxes 27,385 32,698 65,674 73,688 Net Income $ 16,819 $ 20,137 $ 41,045 $ 45,948 Less: Net income attributable to the noncontrolling interest (212) - $ (527) $ - Net Income Attributable to Cash America International, Inc. $ 16,607 $ 20,137 $ 40,518 $ 45,948 Earnings per share: Net Income attributable to Cash America International, Inc. common stockholders: Basic $ 0.56 $ 0.69 $ 1.36 $ 1.57 Diluted $ 0.54 $ 0.67 $ 1.33 $ 1.53 Weighted average shares: Basic 29,804 29,326 29,785 29,348 Diluted 30,515 30,094 30,467 30,103 -------------------------------------------------------------------------------
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) June 30, December 31, 2009 2008 2008 (Unaudited) Assets Current assets: Cash and cash equivalents $ 26,323 $ 29,963 $ 30,005 Pawn loans 176,313 142,211 168,747 Cash advances, net 89,810 85,492 83,850 Merchandise held for disposition, net 102,164 96,807 109,493 Finance and service charges receivable 33,314 27,009 33,063 Income taxes recoverable - - 2,606 Other receivables and prepaid expenses 17,169 14,297 15,480 Deferred tax assets 21,644 22,271 22,037 Total current assets 466,737 418,050 465,281 Property and equipment, net 187,343 172,785 185,887 Goodwill 493,848 403,886 494,192 Intangible assets, net 30,454 21,423 35,428 Other assets 8,243 7,545 5,722 Total assets $ 1,186,625 $ 1,023,689 $ 1,186,510 Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued expenses $ 66,534 $ 62,908 $ 79,759 Accrued supplemental acquisition payment - 56,000 47,064 Customer deposits 9,778 8,673 8,814 Income taxes currently payable 1,324 2,284 - Current portion of long-term debt 14,306 8,500 15,810 Total current liabilities 91,942 138,365 151,447 Deferred tax liabilities 38,763 23,421 27,575 Noncurrent income tax payable 4,059 - 3,050 Other liabilities 3,602 2,025 2,359 Long-term debt 415,491 323,146 422,344 Total liabilities 553,857 486,957 606,775 Stockholders' equity: Cash America International, Inc.
