EX-99.1 2 a5065805ex99-1.txt EXHIBIT 99.1 Exhibit 99.1 Cash America Completes 2005 with 20% Increase in Fourth Quarter Earnings and Declares Dividend FORT WORTH, Texas--(BUSINESS WIRE)--Jan. 26, 2006--Cash America International, Inc. (NYSE:CSH) announced today that income from continuing operations for the fourth quarter ended December 31, 2005 increased 20% to $16,456,000 (55 cents per share) compared to $13,716,000 (46 cents per share) for the same period in 2004. The prior year fourth quarter 2004 results included a gain on foreign currency of $575,000 after tax (2 cents per share). Excluding the impact of the gain in the 2004 results, Cash America's fourth quarter 2005 income from continuing operations exceeded the prior year by 25%. Total revenue for the fourth quarter increased 21% to $171.0 million led by a 27% increase in revenue from combined cash advance fees and service charges on pawn loans which rose from $61.0 million in the 2004 quarter to $77.3 million in the 2005 quarter. In addition, the Company enjoyed strong holiday sales as merchandise sold during the quarter was 18% above the prior year reaching $91.4 million. Commenting on the results of the quarter, Daniel R. Feehan, President and Chief Executive Officer of Cash America said, "The holiday traffic translated into higher sales levels, which benefited further from an increase in year-over-year gross profit margins to 38.7% from 38.1%, providing additional leverage on the increase in revenue contributing to a successful fourth quarter." Same store net revenue, defined as total revenue reduced by cost of goods sold, rose 9.7% in the fourth quarter of 2005 versus the same period in 2004. Cash America finished fiscal year 2005 with income from continuing operations up 28% to $44,821,000 ($1.48 per share) for the twelve-month period compared to $34,965,000 ($1.18 per share) in fiscal 2004. Total revenue for 2005 was $594.3 million, up 27% from $469.5 million in 2004. During the calendar year 2005 Cash America added 51 total lending outlets and has increased its total location count by 200 owned locations, excluding 10 closed locations, over the last 24 months. Cash America will host a conference call to discuss the fourth quarter results on Thursday, January 26th at 3:45 p.m. CST. 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 $0.025 (2.5 cents) per share cash dividend on common stock outstanding. The dividend will be paid to shareholders of record on February 8, 2006 and will be paid at the close of business on February 22, 2006. Outlook for the First Quarter of 2006 and Related Fiscal Year Management believes that continued growth in earnings will be largely a function of sustained increases in demand for its loan products, which lead to higher asset balances and revenue. Other elements that will affect the growth in revenue include the development of new locations opened in the last 24 months and the regulatory governance of its loan products. As it enters 2006, management anticipates that demand for products will remain strong. Based on the preceding factors management expects that the first quarter income from continuing operations will be between 43 cents and 45 cents per share in 2006 compared to 39 cents per share in 2005. Expectations for the remainder of fiscal 2006 will be impacted by the magnitude of personal income tax refunds for many of the Company's customers and the subsequent recovery of earning asset levels in later periods based on customer demand for credit products. Tax refund proceeds, received by the Company's customers during the first quarter, may be used to pay past due cash advance obligations, redeem pawned merchandise and for the purchase of merchandise at the Company's locations. At this time, management expects that full year 2006 earnings per share from income from continuing operations will range between $1.70 and $1.80 compared to $1.48 per share in fiscal 2005. Cash America International, Inc. is a provider of specialty financial services to individuals in the United States with 886 total locations. Cash America is the largest provider of secured non-recourse loans to individuals, commonly referred to as pawn loans, through 464 locations in 21 states under the brand names Cash America Pawn and SuperPawn. The Company also offers short-term cash advances in many of its U.S. locations including 286 locations that offer this service under the brand names Cash America Payday Advance and Cashland. In addition, check cashing services are provided through its 136 franchised and Company-owned "Mr. Payroll" check cashing centers. 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 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, 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", "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) Three Months Ended Year Ended December 31, December 31, ------------------- ------------------- 2005 2004 2005 2004 --------- --------- --------- --------- Consolidated Operations: Total revenue $171,015 $140,781 $594,346 $469,478 Net revenue $114,973 $92,670 $410,547 $315,612 Total operating expenses $86,623 $70,745 $329,835 $254,199 Income from operations $28,350 $21,925 $80,712 $61,413 Income from continuing operations before income taxes $25,775 $21,364 $70,882 $55,023 Income from Continuing Operations $16,456 $13,716 $44,821 $34,965 Income from Discontinued Operations(1) $197 $726 $197 $21,870 Net Income $16,653 $14,442 $45,018 $56,835 Earnings per share: Basic - Income from continuing operations $0.56 $0.48 $1.53 $1.23 Net income $0.57 $0.50 $1.54 $2.00 Diluted - Income from continuing operations $0.55 $0.46 $1.48 $1.18 Net income $0.55 $0.48 $1.49 $1.92 Weighted average shares: Basic 29,252 28,765 29,262 28,402 Diluted 30,169 29,884 30,206 29,584 (1) Includes foreign pawn lending operations in the United Kingdom and Sweden that were sold in September 2004. The 2005 amount represents the tax benefits resulting from final tax adjustments to the 2004 foreign operations tax returns. For 2004, the amounts include gain on disposition of $726 and $15,415 for the quarter and year ended December 31, 2004, respectively. The 2004 year-end results also include income from those operations for the period from January 1, 2004 through September 7, 2004 (the date of sale), of $6,455. CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share data) December 31, -------------------- 2005 2004 ---------- --------- (Unaudited) Assets Current assets: Cash and cash equivalents $18,852 $15,103 Pawn loans 115,280 109,353 Cash advances, net 40,704 36,490 Merchandise held for disposition, net 72,683 67,050 Finance and service charges receivable 22,048 20,458 Other receivables and prepaid expenses 13,406 10,547 Deferred taxes assets 11,274 9,293 ---------- --------- Total current assets 294,247 268,294 Property and equipment, net 94,856 87,612 Goodwill 174,987 164,073 Intangible assets, net 23,391 24,361 Other assets 11,167 10,825 ---------- --------- Total assets $598,648 $555,165 ========== ========= Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued expenses $37,217 $33,854 Customer deposits 6,239 5,686 Income taxes currently payable 1,449 2,505 Current portion of long-term debt 16,786 16,786 ---------- --------- Total current liabilities 61,691 58,831 Deferred tax liabilities 11,344 10,999 Other liabilities 1,689 1,559 Long-term debt 149,208 149,840 ---------- --------- Total liabilities 223,932 221,229 ---------- --------- Stockholders' equity: Common stock, $.10 par value per share, 80,000,000 shares authorized, 30,235,164 shares issued 3,024 3,024 Additional paid-in capital 156,557 154,294 Retained earnings 229,975 187,860 Accumulated other comprehensive income (5) -- Notes receivable secured by common stock (2,488) (2,488) Treasury shares, at cost (999,347 shares and 938,386 shares at December 31, 2005 and 2004, respectively) (12,347) (8,754) ---------- --------- Total stockholders' equity 374,716 333,936 ---------- --------- Total liabilities and stockholders' equity $598,648 $555,165 ========== ========= CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data) Three Months Ended Year Ended December 31, December 31, ------------------- ------------------- 2005 2004 2005 2004 ---------- -------- --------- --------- (Unaudited) Revenue Finance and service charges $37,296 $30,198 $139,772 $110,495 Proceeds from disposition of merchandise 91,401 77,734 301,502 250,291 Cash advance fees 39,954 30,762 142,068 99,202 Check cashing royalties and fees 2,364 2,087 11,004 9,490 ---------- -------- --------- --------- Total Revenue 171,015 140,781 594,346 469,478 Cost of Revenue Disposed merchandise 56,042 48,111 183,799 153,866 ---------- -------- --------- --------- Net Revenue 114,973 92,670 410,547 315,612 ---------- -------- --------- --------- Expenses Operations 58,061 48,117 220,357 173,277 Cash advance loss provision 10,929 8,089 42,834 23,529 Administration 11,303 9,644 43,227 40,183 Depreciation and amortization 6,330 4,895 23,417 17,210 ---------- -------- --------- --------- Total Expenses 86,623 70,745 329,835 254,199 ---------- -------- --------- --------- Income from Operations 28,350 21,925 80,712 61,413 Interest expense 2,996 1,884 10,610 8,148 Interest income (387) (439) (1,614) (642) Foreign currency transaction losses (gains) (34) (884) 834 (1,116) ---------- -------- --------- --------- Income from Continuing Operations before Income Taxes 25,775 21,364 70,882 55,023 Provision for income taxes 9,319 7,648 26,061 20,058 ---------- -------- --------- --------- Income from Continuing Operations 16,456 13,716 44,821 34,965 ---------- -------- --------- --------- Income from discontinued operations before income taxes (including gain on disposal of $19,023 for 2004) -- 121 -- 28,284 Provision for income taxes (benefits) (including $3,608 on gain on disposal for 2004) (197) (605) (197) 6,414 ---------- -------- --------- --------- Income from discontinued operations 197 726 197 21,870 ---------- -------- --------- --------- Net Income $16,653 $14,442 $45,018 $56,835 ========== ======== ========= ========= Earnings Per Share: Basic - Income from continuing operations $0.56 $0.48 $1.53 $1.23 Income from discontinued operations $0.01 $0.03 $0.01 $0.77 Net income $0.57 $0.50 $1.54 $2.00 Diluted - Income from continuing operations $0.55 $0.46 $1.48 $1.18 Income from discontinued operations $0.01 $0.02 $0.01 $0.74 Net income $0.55 $0.48 $1.49 $1.92 Weighted average common shares outstanding: Basic 29,252 28,765 29,262 28,402 Diluted 30,169 29,884 30,206 29,584 Dividends declared per common share $0.025 $0.0175 $0.1000 $0.3700 CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES FINANCIAL AND OPERATING DATA -- CONTINUING OPERATIONS ($ in thousands unless noted otherwise) Three Months Ended Year Ended December 31, December 31, ------------------- ------------------------ 2005 2004 2005 2004 --------- --------- --------- ----------- PAWN LENDING OPERATIONS: Pawn loans Annualized yield on pawn loans 123.7% 131.0% 124.8% 131.1% Total amount of pawn loans written and renewed $108,424 $85,255 $438,955 $336,021 Average pawn loan balance outstanding $119,655 $91,690 $112,031 $84,283 Average pawn loan balance per average location in operation $263 $225 $251 $211 Ending pawn loan balance per location in operation $253 $248 $253 $248 Average pawn loan amount at end of period (not in thousands) $95 $89 $95 $89 Profit margin on disposition of merchandise as a percentage of proceeds from disposition of merchandise 38.7% 38.1% 39.0% 38.5% Average annualized merchandise turnover 2.9x 3.1x 2.7x 3.0x Average balance of merchandise held for disposition per average location in operation $166 $150 $151 $130 Ending balance of merchandise held for disposition per location in operation $159 $152 $159 $152 Pawnshop locations in operation - Beginning of period, owned 453 398 441 398 Acquired 3 42 9 42 Start-ups -- 1 7 3 Combined or closed -- -- (1) (2) --------- -------- ---------- ---------- End of period, owned 456 441 456 441 Franchise locations at end of period 8 11 8 11 --------- -------- ---------- ---------- Total pawnshop locations at end of period 464 452 464 452 ========= ======== ========== ========== Average number of owned pawnshop locations in operation 455 408 447 399 ========= ======== ========== ========== Cash advances Total amount of cash advances written(a) $73,901 $65,709 $275,375 $220,303 Number of cash advances written (not in thousands)(a) 199,567 198,716 798,081 675,008 Average amount per cash advances (not in thousands)(a) $370 $331 $345 $326 Combined cash advances outstanding(a) $19,354 $18,318 $19,354 $18,318 Cash advances outstanding per location at end of period(a) $44 $43 $44 $43 Cash advances outstanding before allowance for losses(b) $9,402 $11,301 $9,402 $11,301 Locations offering cash advances at end of period 441 425 441 425 ========= ======== ========== ========== Average number of locations offering cash advances 436 399 430 391 ========= ======== ========== ========== CASH ADVANCE OPERATIONS (c): Total amount of cash advances written(a) $187,598 $141,415 $654,960 $427,443 Number of cash advances written (not in thousands)(a) 500,128 407,481 1,790,588 1,252,177 Average amount per cash advance (not in thousands)(a) $375 $347 $366 $341 Combined cash advances outstanding(a) $44,921 $33,352 $44,921 $33,352 Cash advances outstanding per location at end of period(a) $157 $132 $157 $132 Cash advances outstanding before allowance for losses(b) $37,611 $29,547 $37,611 $29,547 Cash advance locations in operation - Beginning of period 279 230 253 154 Acquired -- -- 1 32 Start-ups 7 23 34 72 Combined or closed -- -- (2) (5) --------- -------- ---------- ---------- End of period 286 253 286 253 ========= ======== ========== ========== Average number of cash advance locations in operation 283 243 271 192 ========= ======== ========== ========== CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES FINANCIAL AND OPERATING DATA -- CONTINUING OPERATIONS (Continued) ($ in thousands unless noted otherwise) Three Months Ended Year Ended December 31, December 31, --------------------- ------------------------ 2005 2004 2005 2004 ---------- ---------- ----------- ------------ CHECK CASHING OPERATIONS (Mr. Payroll Corp.) (d) Face amount of checks cashed $310,890 $272,829 $1,220,381 $1,132,627 Gross fees collected $4,244 $3,686 $16,964 $15,660 Fees as a percentage of checks cashed 1.4 % 1.4 % 1.4 % 1.4 % Average check cashed (not in thousands) 382 $353 $386 $372 Centers in operation at end of period 136 134 136 134 Average centers in operation for period 137 131 136 135 (a) Includes cash advances made by the Company and cash advances made by third-party lenders offered at the Company's locations. (b) Amounts recorded in the Company's consolidated financial statements. (c) Includes only cash advance locations. (d) Includes franchised and company-owned locations. CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED CASH ADVANCES OUTSTANDING (in thousands) December 31, -------------------- 2005 2004 ----------- -------- Originated by the Company Active cash advances and fees receivable $32,207 $23,967 Cash advances and fees in collection 7,510 5,376 ----------- -------- Total originated by the Company 39,717 29,343 ----------- -------- Originated by third-party lenders Active cash advances and fees receivable 19,548 17,532 Cash advances and fees in collection 5,010 4,795 ----------- -------- Total originated by third-party lenders 24,558 22,327 ----------- -------- Combined gross portfolio 64,275 51,670 Less: Elimination of cash advances owned by third-party lenders 16,912 10,150 Less: Discount on cash advances assigned by third-party lenders 350 672 ----------- -------- Company cash advances and fees receivable, gross 47,013 40,848 Less: Allowance for losses 6,309 4,358 ----------- -------- Cash advances and fees receivable, net $40,704 $36,490 =========== ======== ALLOWANCE FOR LOSSES ON CASH ADVANCES ($ in thousands) Three Months Ended Year Ended December 31, December 31, ------------------- ------------------- 2005 2004 2005 2004 --------- --------- --------- --------- Company-owned cash advances Balance at beginning of period $10,002 $4,592 $4,358 $3,393 Cash advance loss provision 10,882 8,031 42,302 23,242 Charge-offs (17,454) (10,136) (50,145) (29,833) Recoveries 2,879 1,871 9,794 7,556 --------- --------- --------- --------- Balance at end of period $6,309 $4,358 $6,309 $4,358 ========= ========= ========= ========= Accrual for third-party lender-owned cash advances Balance at beginning of period $827 $284 $342 $55 Increase in loss provision 47 58 532 287 --------- --------- --------- --------- Balance at end of period $874 $342 $874 $342 ========= ========= ========= ========= Combined statistics Combined cash advance loss provision $10,929 $8,089 $42,834 $23,529 ========= ========= ========= ========= Charge-offs, net of recoveries $14,575 $8,265 $40,351 $22,277 ========= ========= ========= ========= Combined cash advances written $261,499 $207,124 $930,335 $647,746 ========= ========= ========= ========= Combined cash advance loss provision as a % of combined cash advances written 4.2 % 3.9 % 4.6 % 3.6 % ========= ========= ========= ========= Charge-offs (net of recoveries) as a % of combined cash advances written 5.6 % 4.0 % 4.3 % 3.4 % ========= ========= ========= ========= Combined allowance for losses and accrued third-party losses as a % of combined gross portfolio 11.2 % 9.1 % 11.2 % 9.1 % ========= ========= ========= ========= CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES INCOME FROM CONTINUING OPERATIONS BY OPERATING SEGMENT THREE MONTHS ENDED DECEMBER 31, 2005 AND 2004 (in thousands) Pawn Cash Check Lending Advance Cashing Consolidated --------- --------- ---------- ------------ Three Months Ended December 31, 2005: -------------------------- Revenue Finance and service charges $37,296 $-- $-- $37,296 Proceeds from disposition of merchandise 91,401 -- -- 91,401 Cash advance fees 11,034 28,920 -- 39,954 Check cashing royalties and fees -- 1,464 900 2,364 --------- --------- ---------- ------------ Total revenue 139,731 30,384 900 171,015 Cost of revenue - disposed merchandise 56,042 -- -- 56,042 --------- --------- ---------- ------------ Net revenue 83,689 30,384 900 114,973 --------- --------- ---------- ------------ Expenses Operations 44,226 13,507 328 58,061 Cash advance loss provision 4,194 6,735 -- 10,929 Administration 8,555 2,496 252 11,303 Depreciation and amortization 4,220 2,020 90 6,330 --------- --------- ---------- ------------ Total expenses 61,195 24,758 670 86,623 --------- --------- ---------- ------------ Income from operations $22,494 $5,626 $230 $28,350 ========= ========= ========== ============ As of December 31, 2005: -------------------------- Total assets $475,527 $115,778 $7,343 $598,648 ========= ========= ========== ============ Three Months Ended December 31, 2004: -------------------------- Revenue Finance and service charges $30,198 $-- $-- $30,198 Proceeds from disposition of merchandise 77,734 -- -- 77,734 Cash advance fees 9,502 21,260 -- 30,762 Check cashing royalties and fees -- 1,269 818 2,087 --------- --------- ---------- ------------ Total revenue 117,434 22,529 818 140,781 Cost of revenue - disposed merchandise 48,111 -- -- 48,111 --------- --------- ---------- ------------ Net revenue 69,323 22,529 818 92,670 --------- --------- ---------- ------------ Expenses Operations 35,595 12,158 364 48,117 Cash advance loss provision 2,729 5,360 -- 8,089 Administration 6,489 2,908 247 9,644 Depreciation and amortization 3,257 1,527 111 4,895 --------- --------- ---------- ------------ Total expenses 48,070 21,953 722 70,745 --------- --------- ---------- ------------ Income from operations $21,253 $576 $96 $21,925 ========= ========= ========== ============ As of December 31, 2004: -------------------------- Total assets $442,420 $105,650 $7,095 $555,165 ========= ========= ========== ============ CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES INCOME FROM CONTINUING OPERATIONS BY OPERATING SEGMENT YEAR ENDED DECEMBER 31, 2005 (in thousands) Pawn Cash Check Lending Advance Cashing Consolidated -------- -------- ---------- ------------ Year Ended December 31, 2005: ----------------------------- Revenue Finance and service charges $139,772 $-- $-- $139,772 Proceeds from disposition of merchandise 301,502 -- -- 301,502 Cash advance fees 41,405 100,663 -- 142,068 Check cashing royalties and fees -- 7,185 3,819 11,004 --------- --------- ---------- ------------ Total revenue 482,679 107,848 3,819 594,346 Cost of revenue - disposed merchandise 183,799 -- -- 183,799 --------- --------- ---------- ------------ Net revenue 298,880 107,848 3,819 410,547 --------- --------- ---------- ------------ Expenses Operations 167,272 51,706 1,379 220,357 Cash advance loss provision 15,663 27,171 -- 42,834 Administration 32,769 9,503 955 43,227 Depreciation and amortization 15,786 7,299 332 23,417 --------- --------- ---------- ------------ Total expenses 231,490 95,679 2,666 329,835 --------- --------- ---------- ------------ Income from operations $67,390 $12,169 $1,153 $80,712 ========= ========= ========== ============ Year Ended December 31, 2004: ----------------------------- Revenue Finance and service charges $110,495 $-- $-- $110,495 Proceeds from disposition of merchandise 250,291 -- -- 250,291 Cash advance fees 32,952 66,250 -- 99,202 Check cashing royalties and fees -- 5,904 3,586 9,490 --------- --------- ---------- ------------ Total revenue 393,738 72,154 3,586 469,478 Cost of revenue - disposed merchandise 153,866 -- -- 153,866 --------- --------- ---------- ------------ Net revenue 239,872 72,154 3,586 315,612 --------- --------- ---------- ------------ Expenses Operations 134,878 36,982 1,417 173,277 Cash advance loss provision 8,750 14,779 -- 23,529 Administration 30,034 9,178 971 40,183 Depreciation and amortization 11,984 4,754 472 17,210 --------- --------- ---------- ------------ Total expenses 185,646 65,693 2,860 254,199 --------- --------- ---------- ------------ Income from operations $54,226 $6,461 $726 $61,413 ========= ========= ========== ============ CONTACT: Thomas A. Bessant, Jr., 817-335-1100