EX-99.1 3 d09898exv99w1.txt PRESS RELEASE EXHIBIT 99.1 (CASH AMERICA LOGO) ADDITIONAL INFORMATION: FOR IMMEDIATE RELEASE Thomas A. Bessant, Jr. (817) 335-1100 ******************************************************************************* CASH AMERICA ANNOUNCES THIRD QUARTER RESULTS EXCEED GUIDANCE AND DECLARES DIVIDEND ******************************************************************************* Fort Worth, Texas (October 23, 2003) - - Cash America International, Inc. (NYSE: PWN) reported today that earnings per share related to third quarter 2003 net income is up 69% compared to the same period in 2002. Net income for the third quarter ended September 30, 2003, was $6,042,000 (22 cents per share) compared to the third quarter 2002 net income of $3,182,000 (13 cents per share). The earnings in the third quarter of 2003 included two months of operating results from the recently completed acquisition of Cashland. The third quarter 2003 earnings per share of 22 cents exceeded the Company's publicly announced guidance, issued upon completion of the Cashland transaction, of between 19 cents and 20 cents per share due to higher than projected levels of revenue during the quarter. Total revenue in the third quarter increased 19% to $107,148,000 in the 2003 period from $89,956,000 in 2002 on the strength of a 33% increase in combined service charges and fees on pawn loans and cash advances. The Company's consolidated pawn loan balance finished the quarter 11% above the same date last year. In addition, the Company's profit on the disposition of merchandise in the quarter increased 13% from the prior year as a result of both higher sales and increased gross profit margin on goods sold. The aggregate effect of the increase in service charges and fees combined with the higher profit on the disposition of merchandise produced a $15.2 million, or 27%, increase in net revenue for the three-month period. Commenting on the results for the third quarter, Daniel R. Feehan, President and Chief Executive Officer said, "Continued execution of our operating strategy in the third quarter of 2003 led to a significant increase in revenue for our business as we experienced increases in service charges on pawn loans and fees from cash advances on higher earning asset balances. In addition, we generated a higher contribution from the disposition of goods due to both higher sales levels and gross profit margins. Adding further to the strong quarter was the addition of Cashland which contributed to both net income and earnings per share at a level consistent with our expectations." Excluding Cashland's financial contribution for the two months during third the quarter, Cash America would have posted a 44% increase in operating income to $10.5 million on an 11% increase in total revenue which would have been $99.6 million for the period. Excluding the contribution of Cashland net earnings and the effect of shares issued in conjunction with the acquisition, approximate earnings per share for Cash America would have been 21 cents for the third quarter of 2003, up 62%, compared to the same quarter in 2002. For the nine-month period ended September 30, 2003, Cash America reported that net income, excluding the gain on sale of assets, increased 56% to $17.3 million (67 cents per share) from the 2002 income from continuing operations of $11.1 million (45 cents per share) for the same period. Total revenue for the first nine months of 2003 was $307.1 million compared to $281.7 million in the prior year, up 9%. Cash America will conduct a conference call to discuss its third quarter earnings on Thursday, October 23, 2003, at 3:45 PM CST. A live web cast of the call will be available on the home page 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. Additionally, the Company announced that the Board of Directors, at its regularly scheduled quarterly meeting, declared a $0.0175 (1.75 cents) per share cash dividend on common stock outstanding. The dividend will be paid to shareholders of record on November 5, 2003, and will be paid at the close of business on November 19, 2003. Forward-Looking Information As the Company enters the final quarter of fiscal 2003 it has higher levels of both pawn loans and short-term cash advances than the same period of 2002. These higher asset levels provide earnings momentum that management believes will continue as long as this trend is sustained. At this time management believes that the current economic environment and the higher prevailing market value of gold will allow for the growth in pawn loan balances to satisfy higher customer demand for pawn loans. Management believes these trends and increases in the short-term cash advance balances in response to consumer demand for this alternative product will result in sustained earnings growth for the Company for the remainder of fiscal 2003 and for fiscal 2004. In addition, the Company will have the results of a full three months of Cashland operations during the final quarter of 2003 for the first time. Based on these assumptions, management has revised and increased its forecasted earnings per share for fiscal 2003 to be between $1.04 and $1.07 per share, excluding the impact of the sale of a non-operating asset in the second quarter of 5 cents per share. This compares to 75 cents per share in earnings from continuing operations for fiscal 2002. The management of the Company also establishes an initial expectation of earnings per share for fiscal 2004 of between $1.24 and $1.34. In the near term, management expects that earnings per share for the fourth quarter of fiscal 2003 to be between 38 cents and 40 cents per share compared to 30 cents per share in the fourth quarter of 2002. Cash America International, Inc. is a provider of specialty financial services to individuals in the United States, United Kingdom and Sweden with 748 total locations. Cash America is the largest provider of secured non-recourse loans to individuals, commonly referred to as pawn loans, through 469 locations in 17 states and two foreign countries under the brand names Cash America Pawn in the U.S., Harvey & Thompson in the U.K. and Svensk Pantbelaning in Sweden. The Company also offers short-term cash advances in many of its U.S. locations including 16 locations that offer only this service under the brand name Cash America Payday Advance. In addition, the Company provides short-term cash advances and check cashing through its 129 "Cashland" consumer finance centers, and check cashing services through its 134 franchised and Company-owned "Mr. Payroll" check cashing centers. 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 demand for the Company's services, the actions of third parties who offer products and services at the Company's locations, 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 the capital markets, changes in tax and other laws and governmental rules and regulations applicable to the Company's business, 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, and, in many cases, the Company cannot 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", "plans", "expects", "anticipates" and similar expressions 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) (Unaudited)
Three Months Ended Nine Months Ended September 30, September 30, --------------------------- --------------------------- 2003 2002 2003 2002 ------------ ------------ ------------ ------------ CONSOLIDATED OPERATIONS: Total revenue ............................................... $ 107,148 $ 89,956 $ 307,070 $ 281,663 Net revenue ................................................. 70,564 55,400 193,545 164,041 Total operating expenses .................................... 58,852 48,071 159,791 140,026 ------------ ------------ ------------ ------------ INCOME FROM OPERATIONS ...................................... 11,712 7,329 33,754 24,015 ------------ ------------ ------------ ------------ Income from continuing operations before income taxes ....... 9,322 4,979 28,075 17,280 ------------ ------------ ------------ ------------ INCOME FROM CONTINUING OPERATIONS ........................... 6,042 3,182 18,462 11,067 ------------ ------------ ------------ ------------ NET INCOME .................................................. $ 6,042 $ 3,182 $ 18,462 $ 11,867 ============ ============ ============ ============ Net income per share: Basic - Income from continuing operations ......................... $ 0.23 $ 0.13 $ 0.75 $ 0.45 Net income ................................................ $ 0.23 $ 0.13 $ 0.75 $ 0.49 Diluted - Income from continuing operations ......................... $ 0.22 $ 0.13 $ 0.72 $ 0.45 Net income ................................................ $ 0.22 $ 0.13 $ 0.72 $ 0.48 Weighted average shares - Basic ................................ 25,791 24,412 24,746 24,459 Weighted average shares - Diluted .............................. 27,197 24,773 25,806 24,849 ============ ============ ============ ============
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES HIGHLIGHTS OF CONSOLIDATED RESULTS OF OPERATIONS (in thousands) (Unaudited) PAWN LENDING OPERATIONS FINANCIAL AND OPERATIONAL DATA:
As of September 30, 2003 2002 -------------- -------------- PAWN LOANS - Domestic pawn loans outstanding .............................. $ 83,617 $ 80,362 Foreign pawn loans outstanding ............................... 57,906 46,835 -------------- -------------- Total loans outstanding ...................................... $ 141,523 $ 127,197 ============== ============== Total merchandise held for disposition, net .................. $ 58,262 $ 56,348 ============== ============== Amounts per owned lending location - Domestic only: Loans outstanding ........................................ $ 211 $ 202 Merchandise held for disposition ......................... $ 133 130 Consolidated: Loans outstanding ........................................ $ 308 $ 279 Merchandise held for disposition ......................... $ 127 $ 124 Number of pawnshop locations (not in thousands) - Company owned ............................................ 460 456 Franchised ............................................... 9 13 -------------- -------------- 469 469 ============== ==============
Three Months Ended Nine Months Ended September 30, September 30, --------------------------- --------------------------- 2003 2002 2003 2002 ------------ ------------ ------------ ------------ SMALL CONSUMER CASH ADVANCES ("CASH ADVANCES") (A) - Total amount of cash advances written ........................ $ 48,179 $ 34,072 $ 129,942 $ 82,106 Number of cash advances written (not in thousands) ........... 162,468 120,578 440,712 291,087 Average cash advance amount written (not in thousands) ....... $ 297 $ 283 $ 295 $ 282 Average number of locations offering cash advances (not in thousands)(A) .............................................. 396 390 392 390
As of September 30, ---------------------------- 2003 2002 ------------ ------------ Combined cash advances outstanding (B) ..................... $ 12,646 $ 9,455 Company-owned cash advances (C): Cash advances and fees outstanding ......................... $ 11,174 $ 3,372 Less: Allowance for losses ................................ (2,034) (1,709) ------------ ------------ Net cash advances and fees outstanding ................... $ 9,140 $ 1,663 ============ ============
CASH ADVANCE OPERATIONS FINANCIAL AND OPERATIONAL DATA (D):
Three Months Ended Nine Months Ended September 30, September 30, ------------------------------- ------------------------------- 2003 2002 2003 2002 -------------- -------------- -------------- -------------- Total amount of cash advances written ...................... $ 44,235 $ -- $ 44,235 $ -- Number of cash advances written (not in thousands) ......... 133,022 -- 133,022 -- Average cash advance amount written (not in thousands) ..... $ 333 $ -- $ 333 $ -- Average number of locations offering cash advances (not in thousands) ............................................... 125 -- 125 --
As of September 30, ---------------------------- 2003 2002 ------------ ------------ Cash advances outstanding before allowance for losses ................ $ 15,382 $ -- Less: Allowance for losses .......................................... (1,801) -- ------------ ------------ Net cash advances and fees outstanding ............................. $ 13,581 $ -- ============ ============
Number of cash advance locations (not in thousands) - At acquisition.......................................... 121 -- 121 -- Start-ups............................................... 8 -- 8 -- ------------- ------------- ------------- ------------ End of period........................................... 129 -- 129 -- ============= ============= ============= ============
---------- Footnotes: (A) Includes Cash America pawnshops and Cash America cash advance centers. (B) Includes cash advances made by the Company and cash advances made by third-party financial institutions. (C) Amounts recorded in the Company's consolidated financial statements. (D) Includes Cashland only, for the two-month period August 1, 2003 to September 30, 2003.
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share data) September 30, ---------------------------- December 31, 2003 2002 2002 ------------ ------------ ------------ (Unaudited) ASSETS Current assets: Cash and cash equivalents ....................................... $ 11,768 $ 5,106 $ 3,951 Pawn loans ...................................................... 141,523 127,197 127,388 Cash advances, net .............................................. 22,721 1,663 2,210 Merchandise held for disposition, net ........................... 58,262 56,348 54,444 Finance and service charges receivable .......................... 22,341 20,087 21,096 Other receivables and prepaid expenses .......................... 8,952 6,320 8,671 Income taxes recoverable ........................................ 5,646 1,553 -- Deferred tax assets ............................................. 7,346 5,568 5,392 ------------ ------------ ------------ Total current assets .......................................... 278,559 223,842 223,152 Property and equipment, net ....................................... 76,125 67,763 67,254 Goodwill .......................................................... 114,788 79,339 79,833 Other assets ...................................................... 7,798 6,039 6,239 ------------ ------------ ------------ Total assets .................................................. $ 477,270 $ 376,983 $ 376,478 ============ ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses ........................... $ 30,866 $ 19,411 $ 24,920 Customer deposits ............................................... 4,614 4,593 4,050 Income taxes currently payable .................................. 1,084 992 2,086 Current portion of long-term debt ............................... 8,286 12,571 12,571 ------------ ------------ ------------ Total current liabilities ..................................... 44,850 37,567 43,627 Deferred tax liabilities .......................................... 5,949 3,028 4,385 Long-term debt .................................................... 170,727 153,455 136,131 Stockholders' equity: Common stock, $.10 par value per share, 80,000,000 shares authorized .................................................... 3,024 3,024 3,024 Additional paid-in capital ...................................... 140,645 127,819 127,819 Retained earnings ............................................... 130,560 106,140 113,278 Accumulated other comprehensive income (loss) ................... 1,743 (5,312) (2,718) Notes receivable secured by common stock ........................ (3,023) (6,103) (5,864) Treasury shares at cost ......................................... (17,205) (42,635) (43,204) ------------ ------------ ------------ Total stockholders' equity .................................... 255,744 182,933 192,335 ------------ ------------ ------------ Total liabilities and stockholders' equity .................... $ 477,270 $ 376,983 $ 376,478 ============ ============ ============
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data)
Three Months Ended Nine Months Ended September 30, September 30, ------------------------------- -------------------------------- 2003 2002 2003 2002 -------------- -------------- -------------- -------------- (Unaudited) REVENUE Finance and service charges ............................. $ 33,014 $ 30,530 $ 95,070 $ 86,806 Proceeds from disposition of merchandise ................ 57,765 53,244 180,060 178,557 Cash advance fees ....................................... 14,513 5,088 27,373 12,834 Check cashing royalties and fees ........................ 1,856 1,094 4,567 3,466 -------------- -------------- -------------- -------------- TOTAL REVENUE .............................................. 107,148 89,956 307,070 281,663 COST OF REVENUE Disposed merchandise .................................... 36,584 34,556 113,525 117,622 -------------- -------------- -------------- -------------- NET REVENUE ................................................ 70,564 55,400 193,545 164,041 -------------- -------------- -------------- -------------- EXPENSES Operations .............................................. 40,812 34,586 114,023 102,343 Cash advance loss provision ............................. 4,077 2,070 7,101 4,539 Administration .......................................... 9,771 7,534 27,179 21,993 Depreciation and amortization ........................... 4,192 3,881 11,488 11,151 -------------- -------------- -------------- -------------- TOTAL EXPENSES ............................................. 58,852 48,071 159,791 140,026 -------------- -------------- -------------- -------------- INCOME FROM OPERATIONS ..................................... 11,712 7,329 33,754 24,015 Interest expense, net ................................... 2,390 2,252 6,692 6,565 Loss from derivative valuation fluctuations ............. -- 98 -- 170 Gain from disposal of asset ............................. -- -- (1,013) -- -------------- -------------- -------------- -------------- Income from continuing operations before income taxes ...... 9,322 4,979 28,075 17,280 Provision for income taxes .............................. 3,280 1,797 9,613 6,213 -------------- -------------- -------------- -------------- INCOME FROM CONTINUING OPERATIONS .......................... 6,042 3,182 18,462 11,067 Gain from discontinued operations ....................... -- -- -- 800 -------------- -------------- -------------- -------------- NET INCOME ................................................. $ 6,042 $ 3,182 $ 18,462 $ 11,867 ============== ============== ============== ============== Net income per share: Basic - Income from continuing operations ..................... $ 0.23 $ 0.13 $ 0.75 $ 0.45 Gain from discontinued operations ..................... $ -- $ -- $ -- $ 0.03 Net income ............................................ $ 0.23 $ 0.13 $ 0.75 $ 0.49 Diluted - Income from continuing operations ..................... $ 0.22 $ 0.13 $ 0.72 $ 0.45 Gain from discontinued operations ..................... $ -- $ -- $ -- $ 0.03 Net income ............................................ $ 0.22 $ 0.13 $ 0.72 $ 0.48 Weighted average common shares outstanding: Basic ................................................... 25,791 24,412 24,746 24,459 Diluted ................................................. 27,197 24,773 25,806 24,849 Dividends declared per common share ........................ $ 0.0175 $ 0.0125 $ 0.0475 $ 0.0375
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES INCOME FROM OPERATIONS BY OPERATING SEGMENT THREE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002 (in thousands)
Pawn Lending --------------------------- United Cash Check Advances(a) States Foreign Cashing(b) Consolidated ------------ ------------ ------------ ------------ ------------ THREE MONTHS ENDED SEPTEMBER 30, 2003: REVENUE Finance and service charges .................... $ 25,720 $ 7,294 $ -- $ -- $ 33,014 Proceeds from disposition of merchandise ....... 53,456 4,309 -- -- 57,765 Cash advance fees .............................. 7,454 -- 7,059 -- 14,513 Check cashing royalties and fees ............... -- 507 525 824 1,856 ------------ ------------ ------------ ------------ ------------ TOTAL REVENUE .................................... 86,630 12,110 7,584 824 107,148 Cost of revenue - disposed merchandise ........... 33,599 2,985 -- -- 36,584 ------------ ------------ ------------ ------------ ------------ NET REVENUE ...................................... 53,031 9,125 7,584 824 70,564 ------------ ------------ ------------ ------------ ------------ EXPENSES Operations ..................................... 32,870 4,094 3,444 404 40,812 Cash advance loss provision .................... 2,276 -- 1,801 -- 4,077 Administration ................................. 7,619 1,236 709 207 9,771 Depreciation and amortization .................. 2,879 719 459 135 4,192 ------------ ------------ ------------ ------------ ------------ TOTAL EXPENSES ................................... 45,644 6,049 6,413 746 58,852 ------------ ------------ ------------ ------------ ------------ INCOME FROM OPERATIONS ........................... $ 7,387 $ 3,076 $ 1,171 $ 78 $ 11,712 ============ ============ ============ ============ ============ AS OF SEPTEMBER 30, 2003: Total assets ..................................... $ 306,368 $ 105,430 $ 57,729 $ 7,743 $ 477,270 ============ ============ ============ ============ ============ THREE MONTHS ENDED SEPTEMBER 30, 2002: REVENUE Finance and service charges .................... $ 24,167 $ 6,363 $ -- $ -- $ 30,530 Proceeds from disposition of merchandise ....... 50,447 2,797 -- -- 53,244 Cash advance fees .............................. 5,088 -- -- -- 5,088 Check cashing royalties and fees ............... -- 275 -- 819 1,094 ------------ ------------ ------------ ------------ ------------ TOTAL REVENUE .................................... 79,702 9,435 -- 819 89,956 Cost of revenue - disposed merchandise ........... 32,670 1,886 -- -- 34,556 ------------ ------------ ------------ ------------ ------------ NET REVENUE ...................................... 47,032 7,549 -- 819 55,400 ------------ ------------ ------------ ------------ ------------ EXPENSES Operations ..................................... 31,095 3,130 -- 361 34,586 Cash advance loss provision .................... 2,070 -- -- -- 2,070 Administration ................................. 6,314 1,076 -- 144 7,534 Depreciation and amortization .................. 3,066 659 -- 156 3,881 ------------ ------------ ------------ ------------ ------------ TOTAL EXPENSES ................................... 42,545 4,865 -- 661 48,071 ------------ ------------ ------------ ------------ ------------ INCOME FROM OPERATIONS ........................... $ 4,487 $ 2,684 $ -- $ 158 $ 7,329 ============ ============ ============ ============ ============ AS OF SEPTEMBER 30, 2002: Total assets ..................................... $ 283,483 $ 85,914 $ -- $ 7,586 $ 376,983 ============ ============ ============ ============ ============
---------- (a) Cashland only, for the two-month period August 1, 2003 to September 30, 2003. (b) Mr. Payroll only. CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES INCOME FROM OPERATIONS BY OPERATING SEGMENT NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002 (in thousands)
Pawn Lending --------------------------- United Cash Check Advances(a) States Foreign Cashing(b) Consolidated ------------ ------------ ------------ ------------ ------------ NINE MONTHS ENDED SEPTEMBER 30, 2003: REVENUE Finance and service charges .................... $ 73,868 $ 21,202 $ -- $ -- $ 95,070 Proceeds from disposition of merchandise ....... 168,162 11,898 -- -- 180,060 Cash advance fees .............................. 20,314 -- 7,059 -- 27,373 Check cashing royalties and fees ............... -- 1,307 525 2,735 4,567 ------------ ------------ ------------ ------------ ------------ TOTAL REVENUE .................................... 262,344 34,407 7,584 2,735 307,070 Cost of revenue - disposed merchandise ........... 105,086 8,439 -- -- 113,525 ------------ ------------ ------------ ------------ ------------ NET REVENUE ...................................... 157,258 25,968 7,584 2,735 193,545 ------------ ------------ ------------ ------------ ------------ EXPENSES Operations ..................................... 97,691 11,677 3,444 1,211 114,023 Cash advance loss provision .................... 5,300 -- 1,801 -- 7,101 Administration ................................. 22,437 3,468 709 565 27,179 Depreciation and amortization .................. 8,598 2,052 459 379 11,488 ------------ ------------ ------------ ------------ ------------ TOTAL EXPENSES ................................... 134,026 17,197 6,413 2,155 159,791 ------------ ------------ ------------ ------------ ------------ INCOME FROM OPERATIONS ........................... $ 23,232 $ 8,771 $ 1,171 $ 580 $ 33,754 ============ ============ ============ ============ ============ NINE MONTHS ENDED SEPTEMBER 30, 2002: REVENUE Finance and service charges .................... $ 69,170 $ 17,636 $ -- $ -- $ 86,806 Proceeds from disposition of merchandise ....... 170,097 8,460 -- -- 178,557 Cash advance fees .............................. 12,834 -- -- -- 12,834 Check cashing royalties and fees ............... -- 701 -- 2,765 3,466 ------------ ------------ ------------ ------------ ------------ TOTAL REVENUE .................................... 252,101 26,797 -- 2,765 281,663 Cost of revenue - disposed merchandise ........... 111,474 6,148 -- -- 117,622 ------------ ------------ ------------ ------------ ------------ NET REVENUE ...................................... 140,627 20,649 -- 2,765 164,041 ------------ ------------ ------------ ------------ ------------ EXPENSES Operations ..................................... 92,519 8,696 -- 1,128 102,343 Cash advance loss provision .................... 4,539 -- -- -- 4,539 Administration ................................. 18,472 3,046 -- 475 21,993 Depreciation and amortization .................. 8,859 1,828 -- 464 11,151 ------------ ------------ ------------ ------------ ------------ TOTAL EXPENSES ................................... 124,389 13,570 -- 2,067 140,026 ------------ ------------ ------------ ------------ ------------ INCOME FROM OPERATIONS ........................... $ 16,238 $ 7,079 $ -- $ 698 $ 24,015 ============ ============ ============ ============ ============ -------------------------------- (a) Cashland only, for the two-month period August 1, 2003 to September 30, 2003. (b) Mr. Payroll only.