-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ShdF6T263Lf9hM4EIGnb4HuyqSmJp7rXrU+RnWH2q/YNU+V29XgzYrt5/jpyB/fx JpwIMax4rsPb5VG/UbEXLQ== 0001157523-06-004258.txt : 20060427 0001157523-06-004258.hdr.sgml : 20060427 20060427162449 ACCESSION NUMBER: 0001157523-06-004258 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060427 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060427 DATE AS OF CHANGE: 20060427 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CASH AMERICA INTERNATIONAL INC CENTRAL INDEX KEY: 0000807884 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-MISCELLANEOUS RETAIL [5900] IRS NUMBER: 752018239 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09733 FILM NUMBER: 06785587 BUSINESS ADDRESS: STREET 1: 1600 W 7TH ST CITY: FT WORTH STATE: TX ZIP: 76102 BUSINESS PHONE: 8173351100 MAIL ADDRESS: STREET 1: 1600 WEST 7TH STREET CITY: FORT WORTH STATE: TX ZIP: 76102 FORMER COMPANY: FORMER CONFORMED NAME: CASH AMERICA INVESTMENTS INC /TX/ DATE OF NAME CHANGE: 19920520 8-K 1 a5135020.txt CASH AMERICA INTERNATIONAL, INC. 8-K ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): April 27, 2006 CASH AMERICA INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) Texas 1-9733 75-2018239 (State of incorporation) (Commission File No.) (IRS Employer Identification No.) 1600 West 7th Street Fort Worth, Texas 76102 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (817) 335-1100 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION On April 27, 2006, Cash America International, Inc. (the "Company") announced its consolidated financial results for the first quarter ended March 31, 2006. A copy of the Company's earnings news release is furnished as Exhibit 99.1 to this report on Form 8-K and is incorporated herein by reference. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits - The following exhibit is furnished pursuant to the disclosures included under Item 2.02 of this report on Form 8-K. 99.1 Copy of earnings news release dated April 27, 2006, issued by Cash America International, Inc. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CASH AMERICA INTERNATIONAL, INC. Date: April 27, 2006 By: /s/ J. Curtis Linscott --------------------------------- J. Curtis Linscott Vice President, General Counsel & Secretary EXHIBIT INDEX Exhibit No. Description - ----------- ----------- 99.1 Earnings news release dated April 27, 2006, issued by Cash America International, Inc. EX-99.1 2 a5135020ex99_1.txt EXHIBIT 99.1 Exhibit 99.1 Cash America Begins 2006 with a 29% Increase in First Quarter Net Income and Declares Dividend FORT WORTH, Texas--(BUSINESS WIRE)--April 27, 2006--Cash America International, Inc. (NYSE:CSH) announced today that net income for the first quarter ended March 31, 2006 increased 29% to $15,388,000 (51 cents per share) compared to $11,902,000 (39 cents per share) for the same period in 2005. Earnings per share, which rose 31% for the first three months of 2006 compared to the same period in 2005, exceeded the Company's initially published expectations in January of 2006 and were slightly better than an updated release of expected results for the first quarter on April 6, 2006. Leading the growth in earnings was higher total revenue for the first quarter, which increased 12% to $162.6 million from $145.0 million during the same period in 2005. Total revenue benefited from a 13% increase in revenue from combined cash advance fees and service charges on pawn loans, which rose from $62.2 million in the 2005 first quarter to $70.5 million in the first quarter of 2006. In addition, the Company experienced strong retail sales activity, as merchandise sold during the quarter was 11% above the prior year reaching $87.5 million. Underlying the first quarter growth in total revenue was a 20% increase in total cash advances written and a 6% increase in pawn loans written during the first quarter of 2006 compared to the same period in 2005. Higher volumes and lower loss rates enhanced the overall performance and earnings from the cash advance portfolio. Also contributing to the earnings growth in the first quarter was higher gross profit margins on the 11% increase in merchandise sales during the period, partially attributable to the increase in gold prices during recent months. Commenting on the results of the quarter, Daniel R. Feehan, President and Chief Executive Officer of Cash America, said, "We began the first quarter of 2006 with increased levels of earning assets and an emphasis on execution to enhance the operating performance of our cash advance portfolio. These opportunities and increased customer traffic in our lending locations led to increases in revenue from all business lines and created a very positive result for our shareholders in the first quarter." Cash America will host a conference call to discuss the first quarter results on Thursday, April 27th at 3:45 p.m. 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 $0.025 (2.5 cents) per share cash dividend on common stock outstanding. The dividend will be paid to shareholders of record on May 10, 2006 and will be paid at the close of business on May 24, 2006. Outlook for the Second 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 the second quarter of 2006, management anticipates that demand for the Company's products will remain strong. Based on the preceding factors management expects that the second quarter income from continuing operations will be between 26 cents and 28 cents per share in 2006 compared to 23 cents per share in 2005. Expectations for the remainder of fiscal 2006 will be impacted by earning asset levels in later periods based on customer demand for credit products. At this time, management expects that full year 2006 earnings per share from income from continuing operations will range between $1.76 and $1.86 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 894 total locations. Cash America is the largest provider of secured non-recourse loans to individuals, commonly referred to as pawn loans, through 468 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 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 140 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 March 31, ------------------- 2006 2005 --------- --------- Consolidated Operations: Total revenue $162,618 $144,989 Net revenue $109,876 $97,034 Total operating expenses $83,577 $75,782 Income from operations $26,299 $21,252 Income before income taxes $24,306 $18,849 Net Income $15,388 $11,902 Earnings per share: Basic $0.52 $0.41 Diluted $0.51 $0.39 Weighted average shares: Basic 29,450 29,332 Diluted 30,385 30,396 CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share data) December March 31, 31, ------------------- 2006 2005 2005 --------- --------- --------- (Unaudited) Assets Current assets: Cash and cash equivalents $16,667 $11,874 $18,852 Pawn loans 103,031 97,307 115,280 Cash advances, net 29,704 30,318 40,704 Merchandise held for disposition, net 65,594 59,466 72,683 Finance and service charges receivable 19,140 17,789 22,048 Other receivables and prepaid expenses 15,533 11,941 13,406 Deferred tax assets 9,142 8,372 11,274 --------- --------- --------- Total current assets 258,811 237,067 294,247 Property and equipment, net 97,173 88,906 94,856 Goodwill 175,596 164,374 174,987 Intangible assets, net 22,754 23,558 23,391 Other assets 11,234 11,212 11,167 --------- --------- --------- Total assets $565,568 $525,117 $598,648 ========= ========= ========= Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued expenses $34,246 $27,054 $37,217 Customer deposits 7,295 6,358 6,239 Income taxes currently payable 6,324 6,009 1,449 Current portion of long-term debt 16,786 16,786 16,786 --------- --------- --------- Total current liabilities 64,651 56,207 61,691 Deferred tax liabilities 10,853 10,520 11,344 Other liabilities 1,606 1,404 1,689 Long-term debt 92,270 113,617 149,208 --------- --------- --------- Total liabilities 169,380 181,748 223,932 --------- --------- --------- Stockholders' equity: Common stock 3,024 3,024 3,024 Additional paid-in capital 157,750 154,945 156,557 Retained earnings 244,630 199,050 229,975 Accumulated other comprehensive income (loss) 34 -- (5) Notes receivable secured by common stock (382) (2,488) (2,488) Treasury shares, at cost (8,868) (11,162) (12,347) --------- --------- --------- Total stockholders' equity 396,188 343,369 374,716 --------- --------- --------- Total liabilities and stockholders' equity $565,568 $525,117 $598,648 ========= ========= ========= CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data) Three Months Ended March 31, ----------------- 2006 2005 -------- -------- (Unaudited) Revenue Finance and service charges $35,055 $33,919 Proceeds from disposition of merchandise 87,474 78,741 Cash advance fees 35,439 28,310 Check cashing royalties and fees 4,650 4,019 -------- -------- Total Revenue 162,618 144,989 Cost of Revenue Disposed merchandise 52,742 47,955 -------- -------- Net Revenue 109,876 97,034 -------- -------- Expenses Operations 59,273 53,673 Cash advance loss provision 4,437 5,634 Administration 13,514 10,909 Depreciation and amortization 6,353 5,566 -------- -------- Total Expenses 83,577 75,782 -------- -------- Income from Operations 26,299 21,252 Interest expense (2,436) (2,337) Interest income 378 418 Foreign currency transaction gain (loss) 65 (484) -------- -------- Income before Income Taxes 24,306 18,849 Provision for income taxes 8,918 6,947 -------- -------- Net Income $15,388 $11,902 ======== ======== Net Income Per Share: Basic $0.52 $0.41 Diluted $0.51 $0.39 Weighted average common shares outstanding: Basic 29,450 29,332 Diluted 30,385 30,396 CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES FINANCIAL AND OPERATING DATA ($ in thousands unless noted otherwise) Three Months Ended March 31, ------------------- 2006 2005 --------- --------- PAWN LENDING OPERATIONS: Pawn loans Annualized yield on pawn loans 132.4% 135.2% Total amount of pawn loans written and renewed $103,927 $97,830 Average pawn loan balance outstanding $107,354 $101,736 Average pawn loan balance per average location in operation $235 $231 Ending pawn loan balance per location in operation $225 $221 Average pawn loan amount at end of period (not in thousands) $95 $88 Profit margin on disposition of merchandise as a percentage of proceeds from disposition of merchandise 39.7% 39.1% Average annualized merchandise turnover 3.1x 3.0x Average balance of merchandise held for disposition per average location in operation $153 $145 Ending balance of merchandise held for disposition per location in operation $143 $135 Pawnshop locations in operation -- Beginning of period, owned 456 441 Acquired 2 -- Start-ups 1 1 Combined or closed (1) (1) --------- --------- End of period, owned 458 441 Franchise locations at end of period 10 11 --------- --------- Total pawnshop locations at end of period 468 452 ========= ========= Average number of owned pawnshop locations 457 441 ========= ========= Cash advances Total amount of cash advances written (a) $59,013 $56,740 Number of cash advances written (not in thousands) (a) 151,127 170,578 Average amount per cash advance (not in thousands) (a) $390 $333 Combined cash advances outstanding (a) $13,724 $14,692 Cash advances outstanding per location at end of period (a) $32 $34 Cash advances outstanding before allowance for losses (b) $5,668 $9,059 Locations offering cash advances at end of period 431 427 ========= ========= Average number of locations offering cash advances 433 427 ========= ========= CASH ADVANCE OPERATIONS (c): Total amount of cash advances written (a) $154,917 $122,085 Number of cash advances written (not in thousands) (a) 412,003 350,550 Average amount per cash advance (not in thousands) (a) $376 $348 Combined cash advances outstanding (a) $34,155 $28,146 Cash advances outstanding per location at end of period (a) $119 $107 Cash advances outstanding before allowance for losses (b) $27,577 $24,355 Cash advance locations in operation -- Beginning of period 286 253 Acquired -- -- Start-ups 3 13 Combined or closed (3) (2) --------- --------- End of period 286 264 ========= ========= Average number of cash advance locations 286 258 ========= ========= CHECK CASHING OPERATIONS (Mr. Payroll Corp.) (d) Face amount of checks cashed $376,179 $337,028 Gross fees collected $5,672 $5,014 Fees as a percentage of checks cashed 1.5% 1.5% Average check cashed (not in thousands) $476 $418 Centers in operation at end of period 140 135 ========= ========= Average number of check cashing centers 139 135 ========= ========= (a) Includes cash advances made by the Company and cash advances made by third-party lenders offered at the Company's location (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) March 31, ----------------- 2006 2005 -------- -------- Originated by the Company Active cash advances and fees receivable $24,677 $20,341 Cash advances and fees in collection 4,479 3,446 -------- -------- Total originated by the Company 29,156 23,787 -------- -------- Originated by third-party lenders Active cash advances and fees receivable 15,440 15,149 Cash advances and fees in collection 3,283 3,902 -------- -------- Total originated by third-party lenders 18,723 19,051 -------- -------- Combined gross portfolio 47,879 42,838 Less: Elimination of cash advances owned by third- party lenders 14,599 8,855 Less: Discount on cash advances assigned by third- party banks 35 569 -------- -------- Company-owned cash advances and fees receivable, gross 33,245 33,414 Less: Allowance for losses 3,541 3,096 -------- -------- Cash advances and fees receivable, net $29,704 $30,318 ======== ======== ALLOWANCE FOR LOSSES ON CASH ADVANCES ($ in thousands) Three Months Ended March 31, ----------------- 2006 2005 -------- -------- Company-owned cash advances Balance at beginning of period $6,309 $4,358 Cash advance loss provision 4,706 5,681 Charge-offs (11,045) (9,841) Recoveries 3,571 2,898 -------- -------- Balance at end of period $3,541 $3,096 ======== ======== Accrual for third-party lender-owned cash advances Balance at beginning of period $874 $342 Decrease in loss provision (269) (47) -------- -------- Balance at end of period $605 $295 ======== ======== Combined statistics Combined cash advance loss provision $4,437 $5,634 Combined cash advance loss provision as a % of combined cash advances written 2.1% 3.2% Charge-offs (net of recoveries) as a % of combined cash advances written 3.5% 3.9% Combined allowance for losses and accrued third-party lenders losses as a % of combined gross portfolio 8.7% 7.9% CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES INCOME FROM OPERATIONS BY OPERATING SEGMENT THREE MONTHS ENDED MARCH 31, 2006 AND 2005 (in thousands) Pawn Cash Check Lending Advance Cashing Consolidated --------- --------- ------- ------------ (Unaudited) Three Months Ended March 31, 2006: - ----------------------------- Revenue Finance and service charges $35,055 $-- $-- $35,055 Proceeds from disposition of merchandise 87,474 -- -- 87,474 Cash advance fees 9,648 25,791 -- 35,439 Check cashing royalties and fees -- 3,499 1,151 4,650 --------- --------- ------- ------------ Total revenue 132,177 29,290 1,151 162,618 Cost of revenue -- disposed merchandise 52,742 -- -- 52,742 --------- --------- ------- ------------ Net revenue 79,435 29,290 1,151 109,876 --------- --------- ------- ------------ Expenses Operations 44,217 14,722 334 59,273 Cash advance loss provision 1,883 2,554 -- 4,437 Administration 10,610 2,652 252 13,514 Depreciation and amortization 4,342 1,930 81 6,353 --------- --------- ------- ------------ Total expenses 61,052 21,858 667 83,577 --------- --------- ------- ------------ Income from operations $18,383 $7,432 $484 $26,299 ========= ========= ======= ============ As of March 31, 2006: - ----------------------------- Total assets $453,214 $105,264 $7,090 $565,568 ========= ========= ======= ============ Three Months Ended March 31, 2005: - ----------------------------- Revenue Finance and service charges $33,919 $-- $-- $33,919 Proceeds from disposition of merchandise 78,741 -- -- 78,741 Cash advance fees 8,980 19,330 -- 28,310 Check cashing royalties and fees -- 2,888 1,131 4,019 --------- --------- ------- ------------ Total revenue 121,640 22,218 1,131 144,989 Cost of revenue -- disposed merchandise 47,955 -- -- 47,955 --------- --------- ------- ------------ Net revenue 73,685 22,218 1,131 97,034 --------- --------- ------- ------------ Expenses Operations 40,918 12,373 382 53,673 Cash advance loss provision 2,193 3,441 -- 5,634 Administration 8,362 2,312 235 10,909 Depreciation and amortization 3,792 1,691 83 5,566 --------- --------- ------- ------------ Total expenses 55,265 19,817 700 75,782 --------- --------- ------- ------------ Income from operations $18,420 $2,401 $431 $21,252 ========= ========= ======= ============ As of March 31, 2005: - ----------------------------- Total assets $417,288 $100,728 $7,101 $525,117 ========= ========= ======= ============ CONTACT: Cash America International, Inc., Fort Worth Thomas A. Bessant, Jr., 817-335-1100 -----END PRIVACY-ENHANCED MESSAGE-----