-----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, JxouAPXBx6LuGKG2+uaQAINYB7MtfksaTBF8nAu7ozXlHu7V3b4I0DOPBBwsjlTW giv5lm2qXUcFBRPmv9sBZQ== 0001157523-06-007500.txt : 20060727 0001157523-06-007500.hdr.sgml : 20060727 20060727161708 ACCESSION NUMBER: 0001157523-06-007500 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060727 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060727 DATE AS OF CHANGE: 20060727 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: 06984707 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 a5197544.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): July 27, 2006 CASH AMERICA INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) Texas 1-9733 75-2018239 (State of (Commission (IRS Employer incorporation) File No.) 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 July 27, 2006, Cash America International, Inc. (the "Company") announced its consolidated financial results for the second quarter ended June 30, 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 July 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: July 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 July 27, 2006, issued by Cash America International, Inc. EX-99.1 2 a5197544ex99_1.txt EXHIBIT 99.1 Exhibit 99.1 Cash America Announces a 58% Increase in Year-Over-Year Second Quarter Net Income, Raises Full Year Earnings Expectations and Declares Dividend FORT WORTH, Texas--(BUSINESS WIRE)--July 27, 2006--Cash America International, Inc. (NYSE:CSH) announced today that net income for the second quarter ended June 30, 2006 increased 58% to $10,913,000 (36 cents per share) compared to $6,900,000 (23 cents per share) for the same period in 2005. Included in the 2006 second quarter earnings is a $2.17 million pre-tax gain attributable to the early termination of a store lease, representing an approximate $1.4 million after tax gain (5 cents per share). Excluding this gain, earnings per share from continuing operations increased 35% to 31 cents for the second quarter 2006 compared to 23 cents for the same period in 2005. Earnings per share from continuing operations exceeded the Company's initially published expectations in April of 2006 and were at the top of the range of an updated release of management's anticipated financial results for the second quarter reported on July 10, 2006. The Company experienced a significant increase in total revenue in the second quarter leading to the higher level of earnings than initially expected. The increase in total revenue came from a 12% increase in the combined revenue from fees and service charges on pawn loans plus fees from cash advances which collectively rose to $74.0 million during the 2006 second quarter, up from $66.0 million during the same period last year. In addition, retail sales activity during the period was robust as merchandise sold during the second quarter of 2006 reached $72.9 million, up from $65.3 million in the same period in 2005, an increase of 12%. Total revenue for the second quarter of 2006 was $149.6 million compared to $133.6 million in the prior year period, an increase of $16.0 million or 12% year over year. Commenting on the results of the quarter, Daniel R. Feehan, President and Chief Executive Officer of Cash America said, "Underlying the second quarter 2006 growth in revenue were strong increases in total cash advances written and pawn loans written as customer demand continues to rise. Also contributing to the successful quarter were higher gross profit margins on the disposition of merchandise which we experienced in our retail store locations as well as through open market liquidations of refined gold." The improvement on the gross profit margin on merchandise sold led to a 13% increase in net revenue for the second quarter of 2006 compared to the same period in 2005. Same store net revenue for locations open for more than one year rose 7.4% during the period. For the first six months of fiscal year 2006, Cash America produced an increase in net income of 40% to $26,301,000 (86 cents per share) compared to $18,802,000 (62 cents per share) in the same period for the prior year. Excluding the after-tax gain of $1.4 million attributable to the early termination of a store lease, net income for the six-month period in 2006 was up 32% to $24,892,000 (82 cents per share) compared to the first half of fiscal 2005. This increase was achieved on a 12% increase in total revenue, which reached $312.2 million in the six months ended June 30, 2006 compared to $278.6 million for the same period in the prior year. Cash America will host a conference call to discuss the second quarter results on Thursday, July 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 August 9, 2006 and will be paid at the close of business on August 23, 2006. Outlook for the Third 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 generally lead to higher asset balances and revenue. Other elements expected to affect the growth in revenue include the development of the 182 additional lending locations opened or acquired during the last 24 months and the regulatory governance of consumer loan products. As it enters the third quarter of 2006, management anticipates that demand for the Company's products will remain strong. Based on the preceding factors, management expects that the third quarter net income will be between 38 cents and 41 cents per share in 2006, compared to 32 cents per share in 2005. This estimate excludes any potential future benefit from the pending completion of its recently announced acquisition transaction with CashNetUSA, which is more fully described below. 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 net income will range between $1.85 and $1.93 compared to $1.48 per share in fiscal 2005. The 2006 full year estimates do not include the $1.4 million after tax gain (5 cents per share) related to the early termination of a store lease reported in the second quarter. On July 10, 2006, the Company announced that it executed an agreement for the future purchase of the assets of CashNetUSA (www.cashnetusa.com), an innovative provider of online cash advance loans. Management reported that the transaction was expected to close within 60 days from the date of the announcement. Assuming that the acquisition is completed during the time frame expected, management expects incremental earnings of between 4 and 5 cents per share in fiscal 2006. These earnings are not included in the expected earnings noted above. Cash America International, Inc. is a provider of specialty financial services to individuals in the United States with 896 total locations. Cash America is the largest provider of secured non-recourse loans to individuals, commonly referred to as pawn loans, through 467 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 291 locations that offer this service under the brand names Cash America Payday Advance and Cashland. In addition, check cashing services are provided through its 138 franchised and Company-owned "Mr. Payroll" check cashing centers. For additional information, visit the Company's website located at www.cashamerica.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 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, 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, 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 Six Months Ended June 30, June 30, ------------------- ------------------- 2006 2005 2006 2005 --------- --------- --------- --------- Consolidated Operations: Total revenue $149,607 $133,569 $312,225 $278,558 Net revenue $106,721 $94,630 $216,597 $191,664 Total expenses $89,638 $81,074 $173,215 $156,856 Income from operations $17,083 $13,556 $43,382 $34,808 Net Income $10,913 $6,900 $26,301 $18,802 Earnings per share: Basic $0.37 $0.24 $0.89 $0.64 Diluted $0.36 $0.23 $0.86 $0.62 Weighted average shares: Basic 29,673 29,219 29,562 29,275 Diluted 30,569 30,079 30,484 30,256 CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share data) June 30, December 31, ------------------- 2006 2005 2005 --------- --------- ------------ (Unaudited) Assets Current assets: Cash and cash equivalents $17,733 $11,771 $18,852 Pawn loans 124,514 116,046 115,280 Cash advances, net 39,005 42,742 40,704 Merchandise held for disposition, net 68,787 61,846 72,683 Finance and service charges receivable 21,273 19,666 22,048 Other receivables and prepaid expenses 14,507 12,480 13,406 Income taxes recoverable -- 1,064 -- Deferred tax assets 12,103 11,293 11,274 --------- --------- ------------ Total current assets 297,922 276,908 294,247 Property and equipment, net 103,943 91,224 94,856 Goodwill 175,574 167,190 174,987 Intangible assets, net 21,984 23,078 23,391 Other assets 12,235 10,464 11,167 --------- --------- ------------ Total assets $611,658 $568,864 $598,648 ========= ========= ============ Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued expenses $38,303 $31,004 $37,217 Customer deposits 7,080 6,388 6,239 Income taxes currently payable 1,989 -- 1,449 Current portion of long-term debt 16,786 16,786 16,786 --------- --------- ------------ Total current liabilities 64,158 54,178 61,691 Deferred tax liabilities 11,314 12,654 11,344 Other liabilities 1,585 1,437 1,689 Long-term debt 128,515 152,421 149,208 --------- --------- ------------ Total liabilities 205,572 220,690 223,932 --------- --------- ------------ Stockholders' equity: Common stock, $.10 par value per share, 80,000,000 shares authorized, 30,235,164 shares issued 3,024 3,024 3,024 Additional paid-in capital 159,260 155,357 156,557 Retained earnings 254,802 205,219 229,975 Accumulated other comprehensive income (loss) 66 -- (5) Notes receivable secured by common stock (382) (2,488) (2,488) Treasury shares, at cost (679,143 shares, 1,108,189 shares and 999,347 shares at June 30, 2006 and 2005, and December 31, 2005, respectively) (10,684) (12,938) (12,347) --------- --------- ------------ Total stockholders' equity 406,086 348,174 374,716 --------- --------- ------------ Total liabilities and stockholders' equity $611,658 $568,864 $598,648 ========= ========= ============ CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data) Three Months Ended Six Months Ended June 30, June 30, ------------------ ----------------- 2006 2005 2006 2005 --------- -------- -------- -------- (Unaudited) Revenue Finance and service charges $34,588 $32,577 $69,643 $66,496 Proceeds from disposition of merchandise 72,917 65,333 160,391 144,074 Cash advance fees 39,395 33,376 74,834 61,686 Check cashing royalties and fees 2,707 2,283 7,357 6,302 --------- -------- -------- -------- Total Revenue 149,607 133,569 312,225 278,558 Cost of Revenue Disposed merchandise 42,886 38,939 95,628 86,894 --------- -------- -------- -------- Net Revenue 106,721 94,630 216,597 191,664 --------- -------- -------- -------- Expenses Operations 59,642 54,027 118,915 107,700 Cash advance loss provision 10,798 10,769 15,235 16,403 Administration 12,695 10,604 26,209 21,513 Depreciation and amortization 6,503 5,674 12,856 11,240 --------- -------- -------- -------- Total Expenses 89,638 81,074 173,215 156,856 --------- -------- -------- -------- Income from Operations 17,083 13,556 43,382 34,808 Interest expense (2,412) (2,490) (4,848) (4,827) Interest income 389 407 767 825 Foreign currency transaction gain (loss) 113 (431) 178 (915) Gain from termination of contract 2,167 -- 2,167 -- --------- -------- -------- -------- Income from Operations before Income Taxes 17,340 11,042 41,646 29,891 Provision for income taxes 6,427 4,142 15,345 11,089 --------- -------- -------- -------- Net Income $10,913 $6,900 $26,301 $18,802 ========= ======== ======== ======== Earnings Per Share: Basic $0.37 $0.24 $0.89 $0.64 Diluted $0.36 $0.23 $0.86 $0.62 Weighted average common shares outstanding: Basic 29,673 29,219 29,562 29,275 Diluted 30,569 30,079 30,484 30,256 Dividends declared per common share $0.025 $0.025 $0.050 $0.050 CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES FINANCIAL AND OPERATING DATA ($ in thousands unless noted otherwise) Three Months Ended Six Months Ended June 30, June 30, ------------------- ------------------- 2006 2005 2006 2005 --------- --------- --------- --------- PAWN LENDING OPERATIONS: Pawn loans Annualized yield on pawn loans 121.5 % 122.6 % 125.5 % 127.6 % Total amount of pawn loans written and renewed $123,974 $114,348 $227,901 $212,178 Average pawn loan balance outstanding $114,186 $106,547 $111,875 $105,118 Average pawn loan balance per average location in operation $249 $240 $245 $238 Ending pawn loan balance per location in operation $272 $261 $272 $261 Average pawn loan amount at end of period (not in thousands) $96 $88 $96 $88 Profit margin on disposition of merchandise as a percentage of proceeds from disposition of merchandise 41.2 % 40.4 % 40.4 % 39.7 % Average annualized merchandise turnover 2.6x 2.6x 2.8x 2.8x Average balance of merchandise held for disposition per average location in operation $145 $135 $150 $141 Ending balance of merchandise held for disposition per location in operation $151 $139 $151 $139 Pawnshop locations in operation -- Beginning of period, owned 458 441 456 441 Acquired -- 2 2 2 Start-ups -- 2 1 3 Combined or closed (1) -- (2) (1) --------- --------- ---------- -------- End of period, owned 457 445 457 445 Franchise locations at end of period 10 11 10 11 --------- --------- ---------- -------- Total pawnshop locations at end of period 467 456 467 456 ========= ========= ========== ======== Average number of owned pawnshop locations 458 444 457 442 ========= ========= ========== ======== Cash advances Total amount of cash advances written (a) $65,734 $68,191 $124,746 $124,931 Number of cash advances written (not in thousands) (a) 168,377 209,342 319,504 379,920 Average amount per cash advance (not in thousands) (a) $390 $326 $390 $329 Combined cash advances outstanding (a) $17,742 $20,279 $17,742 $20,279 Cash advances outstanding per location at end of period (a) $43 $47 $43 $47 Cash advances outstanding before allowance for losses (b) $7,585 $13,193 $7,585 $13,193 Locations offering cash advances at end of period 415 429 415 429 ========= ========= ========== ======== Average number of locations offering cash advances 427 428 430 427 ========= ========= ========== ======== CASH ADVANCE OPERATIONS (c): Total amount of cash advances written (a) $177,004 $156,150 $331,922 $278,235 Number of cash advances written (not in thousands) (a) 478,884 434,911 890,887 785,461 Average amount per cash advance (not in thousands) (a) $370 $359 $373 $354 Combined cash advances outstanding (a) $45,940 $42,520 $45,940 $42,520 Cash advances outstanding per location at end of period (a) $158 $157 $158 $157 Cash advances outstanding before allowance for losses (b) $38,961 $37,269 $38,961 $37,269 Cash advance locations in operation -- Beginning of period 286 264 286 253 Acquired -- 1 -- 1 Start-ups 5 6 8 19 Combined or closed -- -- (3) (2) --------- --------- ---------- -------- End of period 291 271 291 271 ========= ========= ========== ======== Average number of cash advance locations 287 267 288 262 ========= ========= ========== ======== CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES FINANCIAL AND OPERATING DATA (Continued) ($ in thousands unless noted otherwise) Three Months Ended Six Months Ended June 30, June 30, ------------------- ------------------- 2006 2005 2006 2005 --------- --------- --------- --------- CHECK CASHING OPERATIONS (Mr. Payroll Corp.) (d) Face amount of checks cashed $310,412 $277,595 $686,592 $614,623 Gross fees collected $4,280 $3,756 $9,950 $8,770 Fees as a percentage of checks cashed 1.4% 1.4% 1.4% 1.4% Average check cashed (not in thousands) $397 $367 $437 $393 Centers in operation at end of period 138 136 138 136 ========= ========= ========= ========= Average number of check cashing centers 139 135 139 135 ========= ========= ========= ========= - ----------------------------- (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) June 30, ----------------- 2006 2005 -------- -------- Originated by the Company Active cash advances and fees receivable $32,016 $30,220 Cash advances and fees in collection 7,615 6,840 -------- -------- Total originated by the Company 39,631 37,060 -------- -------- Originated by third-party lenders Active cash advances and fees receivable 18,143 19,531 Cash advances and fees in collection 5,908 6,208 -------- -------- Total originated by third-party lenders 24,051 25,739 -------- -------- Combined gross portfolio 63,682 62,799 Less: Elimination of cash advances owned by third- party lenders 17,136 11,466 Less: Discount on cash advances assigned by third- party banks -- 871 -------- -------- Company-owned cash advances and fees receivable, gross 46,546 50,462 Less: Allowance for losses 7,541 7,720 -------- -------- Cash advances and fees receivable, net $39,005 $42,742 ======== ======== Three Months Ended Six Months Ended June 30, June 30, ------------------- ----------------- 2006 2005 2006 2005 ---------- -------- -------- -------- Allowance for company-owned cash advances Balance at beginning of period $3,541 $3,096 $6,309 $4,358 Cash advance loss provision 10,512 10,457 15,218 16,138 Charge-offs (8,612) (7,861) (19,657) (17,701) Recoveries 2,100 2,028 5,671 4,925 ---------- -------- -------- -------- Balance at end of period $7,541 $7,720 $7,541 $7,720 ========== ======== ======== ======== Accrual for third-party lender- owned cash advances Balance at beginning of period $605 $295 $874 $342 Increase in loss provision 286 312 17 265 ---------- -------- -------- -------- Balance at end of period $891 $607 $891 $607 ========== ======== ======== ======== Combined statistics Combined cash advance loss provision $10,798 $10,769 $15,235 $16,403 ========== ======== ======== ======== Combined cash advance loss provision as a % of combined cash advances written 4.5% 4.8% 3.3% 4.1% ========== ======== ======== ======== Charge-offs (net of recoveries) as a % of combined cash advances written 2.7% 2.6% 3.1% 3.2% ========== ======== ======== ======== Combined allowance for losses and accrued third-party lenders losses as a % of combined gross portfolio 13.2% 13.3% 13.2% 13.3% ========== ======== ======== ======== CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES INCOME FROM OPERATIONS BY OPERATING SEGMENT THREE MONTHS ENDED JUNE 30, 2006 AND 2005 (in thousands) Pawn Cash Check Lending Advance Cashing Consolidated --------- --------- ------- ------------ Three Months Ended June 30, 2006: - ----------------------------- Revenue Finance and service charges $34,588 $-- $-- $34,588 Proceeds from disposition of merchandise 72,917 -- -- 72,917 Cash advance fees 10,282 29,113 -- 39,395 Check cashing royalties and fees -- 1,834 873 2,707 --------- --------- ------- ------------ Total revenue 117,787 30,947 873 149,607 Cost of revenue -- disposed merchandise 42,886 -- -- 42,886 --------- --------- ------- ------------ Net revenue 74,901 30,947 873 106,721 --------- --------- ------- ------------ Expenses Operations 44,799 14,523 320 59,642 Cash advance loss provision 3,724 7,074 -- 10,798 Administration 7,441 4,686 568 12,695 Depreciation and amortization 4,478 1,936 89 6,503 --------- --------- ------- ------------ Total expenses 60,442 28,219 977 89,638 --------- --------- ------- ------------ Income (loss) from operations $14,459 $2,728 $(104) $17,083 ========= ========= ======= ============ As of June 30, 2006: - ----------------------------- Total assets $489,686 $114,546 $7,426 $611,658 ========= ========= ======= ============ Three Months Ended June 30, 2005: - ----------------------------- Revenue Finance and service charges $32,577 $-- $-- $32,577 Proceeds from disposition of merchandise 65,333 -- -- 65,333 Cash advance fees 10,050 23,326 -- 33,376 Check cashing royalties and fees -- 1,440 843 2,283 --------- --------- ------- ------------ Total revenue 107,960 24,766 843 133,569 Cost of revenue - disposed merchandise 38,939 -- -- 38,939 --------- --------- ------- ------------ Net revenue 69,021 24,766 843 94,630 --------- --------- ------- ------------ Expenses Operations 40,998 12,703 326 54,027 Cash advance loss provision 4,075 6,694 -- 10,769 Administration 6,268 4,047 289 10,604 Depreciation and amortization 3,817 1,777 80 5,674 ------------------ ------- ------------ Total expenses 55,158 25,221 695 81,074 --------- --------- ------- ------------ Income (loss) from operations $13,863 $(455) $148 $13,556 ========= ========= ======= ============ As of June 30, 2005: - ----------------------------- Total assets $450,362 $111,683 $6,819 $568,864 ========= ========= ======= ============ Note: To more accurately estimate the administrative expenses associated with each operating segment, the Company began in the second quarter of 2006 to allocate its aggregate administrative expenses on a different basis. Management believes that the current methodology creates a more balanced allocation among the segments based on the time, resources and activities associated with the administrative activities of each operating segment. All prior periods have been revised to reflect this change in the allocation of administrative burden. There is no change to the consolidated performance of the Company for any period. There are no other changes to the segment results other than to the administrative expense allocation. - ---------------------------------------------------------------------- CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES INCOME FROM OPERATIONS BY OPERATING SEGMENT SIX MONTHS ENDED JUNE 30, 2006 AND 2005 (in thousands) Pawn Cash Check Lending Advance Cashing Consolidated -------- -------- ------- ------------ Six Months Ended June 30, 2006: - ------------------------------- Revenue Finance and service charges $69,643 $-- $-- $69,643 Proceeds from disposition of merchandise 160,391 -- -- 160,391 Cash advance fees 19,930 54,904 -- 74,834 Check cashing royalties and fees -- 5,333 2,024 7,357 -------- -------- ------- ------------ Total revenue 249,964 60,237 2,024 312,225 Cost of revenue -- disposed merchandise 95,628 -- -- 95,628 -------- -------- ------- ------------ Net revenue 154,336 60,237 2,024 216,597 -------- -------- ------- ------------ Expenses Operations 89,016 29,245 654 118,915 Cash advance loss provision 5,607 9,628 -- 15,235 Administration 15,574 9,754 881 26,209 Depreciation and amortization 8,820 3,866 170 12,856 -------- -------- ------- ------------ Total expenses 119,017 52,493 1,705 173,215 -------- -------- ------- ------------ Income from operations $35,319 $7,744 $319 $43,382 ======== ======== ======= ============ Six Months Ended June 30, 2005: - ------------------------------- Revenue Finance and service charges $66,496 $-- $-- $66,496 Proceeds from disposition of merchandise 144,074 -- -- 144,074 Cash advance fees 19,030 42,656 -- 61,686 Check cashing royalties and fees -- 4,328 1,974 6,302 -------- -------- ------- ------------ Total revenue 229,600 46,984 1,974 278,558 Cost of revenue -- disposed merchandise 86,894 -- -- 86,894 -------- -------- ------- ------------ Net revenue 142,706 46,984 1,974 191,664 -------- -------- ------- ------------ Expenses Operations 81,916 25,076 708 107,700 Cash advance loss provision 6,268 10,135 -- 16,403 Administration 12,916 8,024 573 21,513 Depreciation and amortization 7,609 3,468 163 11,240 -------- -------- ------- ------------ Total expenses 108,709 46,703 1,444 156,856 -------- -------- ------- ------------ Income from operations $33,997 $281 $530 $34,808 ======== ======== ======= ============ See Note above regarding the revised methodology of allocating the aggregate administrative expenses to the operating segments. CONTACT: Cash America International, Inc. Thomas A. Bessant, Jr., 817-335-1100 -----END PRIVACY-ENHANCED MESSAGE-----