EX-99.1 2 a5387946ex99-1.txt EXHIBIT 99.1 Exhibit 99.1 Cash America Announces a 25% Increase in First Quarter Net Income and Declares Dividend FORT WORTH, Texas--(BUSINESS WIRE)--April 26, 2007--Cash America International, Inc. (NYSE: CSH) announced today that net income for the first quarter ended March 31, 2007 increased 25% to $19,234,000 (63 cents per share) compared to $15,388,000 (51 cents per share) for the same period in 2006. Earnings per share for the first three months of 2007 were at the upper end of the Company's expectations published in January 2007 of between 60 and 64 cents per share. The increase in earnings was largely due to a significant increase in revenue from cash advance loans, which contributed to a 37% increase in consolidated total revenue for the first quarter of 2007 compared to the same period in 2006. Total revenue reached $222.9 million for the three-month period ended March 31, 2007. Revenue from the Company's cash advance product more than doubled to $78.5 million, due primarily to higher levels of assets outstanding and the addition of the Company's online cash advance product through CashNetUSA that was acquired in the third quarter of 2006. Revenue from the Company's other core business activities also rose significantly as service charges and fees on pawn loans rose 10% to $38.4 million and revenue from the sale of merchandise increased 15% to $100.2 million in year-over-year first quarter comparisons. Driving the growth in cash advance fees was a 107% increase in consolidated cash advances written by the Company and third-party lenders during the 2007 period, compared to the first quarter of 2006. This growth in cash advances written was enhanced by the growth of CashNetUSA which expanded into new markets in late 2006 and early 2007. In addition, the Company's bricks and mortar lending locations also posted increases in loan volumes. The Company's revenue from service charges on pawn loans increased on the strength of higher pawn loan balances outstanding during the quarter and a 6% increase in pawn loans written during the quarter, compared to the prior year period. Pawn loan balances outstanding finished the first quarter of 2007 up 9% from the same date in 2006. Consolidated same store net revenue was up 8.6% for the three month period in 2007 versus the same period in 2006. Commenting on the first quarter results, Daniel R. Feehan, President and Chief Executive Officer of Cash America said, "The robust growth in revenue from cash advance activities in the first quarter of 2007 was largely the result of a significant influx of new customers into our portfolio and a tripling of loans receivable within the cash advance business segment, compared to the end of the first quarter in 2006. New customers typically bring higher levels of bad debt expense as new customers have historically represented a higher risk loan with greater delinquency rates. During the period, we increased our provision expense for loan losses accordingly. After absorbing these expenses, the Company generated a 29% increase in income from operations in the first quarter of 2007 compared to the same period in 2006." He added, "We emerge from the quarter with a larger platform of new customers and higher levels of income producing assets after absorbing the customer acquisition economics." Cash America will host a conference call to discuss the first quarter results on Thursday, April 26th at 3:45 PM 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 $0.035 (3.5 cents) per share cash dividend on common stock outstanding. The dividend will be paid to shareholders of record on May 9, 2007, and will be paid at the close of business on May 23, 2007. Outlook for the Second Quarter of 2007 and Related Fiscal Year Management believes that the opportunities for sustained growth in revenue and earnings will be largely associated with the customer demand for the credit products provided by the Company, which take the form of pawn loans and short-term cash advances. Other elements expected to affect the growth in revenue include the ongoing maturation of the 237 gross additional pawn and cash advance locations opened or acquired during the last 36 months, the regulatory governance of loan products and the development and profitable growth of the Company's online distribution channel for cash advance products. As it enters the second quarter of 2007, management anticipates that demand for the Company's products will remain strong. Based on its views and on the preceding factors management expects that the second quarter 2007 net income per share will be between 38 and 42 cents per share compared to 31 cents per share in the second quarter 2006, which excludes an after tax gain of 5 cents per share. The gain in the second quarter of 2006 was from the early termination of a store lease, representing approximately $2.2 million before taxes. Expectations for the remainder of fiscal 2007 will be impacted by earning asset levels in later periods based on customer demand for credit products. At this time, management confirms its previously announced expectation for the full year 2007 earnings per share of between $2.45 and $2.55 compared to $1.95 per share in fiscal 2006, which excludes the previously discussed after-tax gain of 5 cents per share in the second quarter 2006. Cash America International, Inc. is a provider of specialty financial services to individuals in the United States with 925 total locations. Cash America is the largest provider of secured non-recourse loans to individuals, commonly referred to as pawn loans, through 489 locations in 22 states under the brand names Cash America Pawn and SuperPawn. The Company also offers short-term cash advances in many of its locations including 296 locations that offer this service under the brand names Cash America Payday Advance and Cashland. Short-term cash advances are also offered to customers via the Internet distribution channel of CashNetUSA located at www.cashnetusa.com. In addition, check cashing services are provided through its 140 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, fluctuations in the price of gold, changes in competition, the ability of the Company to open new operating units in accordance with its plans, economic conditions, real estate market fluctuations, interest rate fluctuations, changes in 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 March 31, ------------------------- 2007 2006 ---------- --------- Consolidated Operations: Total revenue $222,867 $162,955 Net revenue $160,942 $110,213 Total operating expenses $126,944 $83,914 Income from operations $33,998 $26,299 Income before income taxes $30,712 $24,306 Net Income $19,234 $15,388 Earnings per share: Basic $0.64 $0.52 Diluted $0.63 $0.51 Weighted average shares: Basic 29,873 29,514 Diluted 30,602 30,385 CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share data) March 31, December 31, ------------------- ------------ 2007 2006 2006 --------- --------- ------------ (Unaudited) Assets Current assets: Cash and cash equivalents $25,728 $16,667 $25,723 Pawn loans 112,009 103,031 127,384 Cash advances, net 67,384 29,704 79,975 Merchandise held for disposition, net 80,798 65,594 87,060 Finance and service charges receivable 22,338 19,140 25,377 Other receivables and prepaid expenses 19,058 15,533 16,128 Deferred tax assets 17,609 9,142 16,324 --------- --------- --------- Total current assets 344,924 258,811 377,971 Property and equipment, net 124,752 97,173 119,261 Goodwill 238,836 175,596 238,499 Intangible assets, net 26,564 22,754 27,477 Other assets 12,810 11,234 13,036 --------- --------- --------- Total assets $747,886 $565,568 $776,244 ========= ========= ========= Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued expenses $57,169 $34,246 $91,217 Customer deposits 8,358 7,295 7,464 Income taxes currently payable 12,000 6,324 2,691 Current portion of long-term debt 16,786 16,786 16,786 --------- --------- --------- Total current liabilities 94,313 64,651 118,158 Deferred tax liabilities 13,483 10,853 12,770 Other liabilities 1,573 1,606 1,625 Long-term debt 181,330 92,270 202,963 --------- --------- --------- Total liabilities 290,699 169,380 335,516 --------- --------- --------- Stockholders' equity: Common stock, 30,235,164 shares issued 3,024 3,024 3,024 Additional paid-in capital 161,858 157,750 161,683 Retained earnings 306,157 244,630 287,962 Accumulated other comprehensive income 9 34 20 Notes receivable secured by common stock (18) (382) (18) Treasury shares, at cost (13,843) (8,868) (11,943) --------- --------- --------- Total stockholders' equity 457,187 396,188 440,728 --------- --------- --------- Total liabilities and stockholders' equity $747,886 $565,568 $776,244 ========= ========= ========= CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data) Three Months Ended March 31, ------------------- 2007 2006 ---------- -------- (Unaudited) Revenue Finance and service charges $38,431 $35,055 Proceeds from disposition of merchandise 100,168 87,124 Cash advance fees 78,516 35,439 Check cashing fees, royalties and other 5,752 5,337 ---------- -------- Total Revenue 222,867 162,955 Cost of Revenue Disposed merchandise 61,925 52,742 ---------- -------- Net Revenue 160,942 110,213 ---------- -------- Expenses Operations 72,367 59,273 Cash advance loss provision 32,748 4,437 Administration 14,295 13,851 Depreciation and amortization 7,534 6,353 ---------- -------- Total Expenses 126,944 83,914 ---------- -------- Income from Operations 33,998 26,299 Interest expense (3,748) (2,436) Interest income 418 378 Foreign currency transaction gain 44 65 ---------- -------- Income before Income Taxes 30,712 24,306 Provision for income taxes 11,478 8,918 ---------- -------- Net Income $19,234 $15,388 ========== ======== Net Income Per Share: Basic $0.64 $0.52 Diluted $0.63 $0.51 Weighted average common shares outstanding: Basic 29,873 29,514 Diluted 30,602 30,385 Dividends declared per common share $0.035 $0.025 CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES FINANCIAL AND OPERATING DATA ($ in thousands unless otherwise noted) Three Months Ended March 31, ------------------- 2007 2006 --------- --------- PAWN LENDING OPERATIONS: Pawn loans Annualized yield on pawn loans 131.8 % 132.4 % Total amount of pawn loans written and renewed $110,622 $103,927 Average pawn loan balance outstanding $118,242 $107,354 Average pawn loan balance per average location in operation $248 $235 Ending pawn loan balance per location in operation $235 $225 Average pawn loan amount at end of period (not in thousands) $106 $95 Profit margin on disposition of merchandise as a percentage of proceeds from disposition of merchandise 38.2 % 39.5 % Average annualized merchandise turnover 3.0x 3.1x Average balance of merchandise held for disposition per average location in operation $178 $153 Ending balance of merchandise held for disposition per location in operation $169 $143 Pawnshop locations in operation - Beginning of period, owned 475 456 Acquired 1 2 Start-ups 1 1 Combined or closed - (1) --------- --------- End of period, owned 477 458 Franchise locations at end of period 12 10 --------- --------- Total pawnshop locations at end of period 489 468 ========= ========= Average number of owned pawnshop locations in operation 477 457 ========= ========= Cash advances (a) Pawn locations offering cash advances at end of year 426 431 Average number of pawn locations offering cash advances 425 433 Amount of cash advances written at pawn locations: Funded by the Company $15,486 $14,309 Funded by third-party lenders (b) (d) 44,985 44,704 --------- --------- Aggregate amount of cash advances written at pawn locations (b) (f) $60,471 $59,013 ========= ========= Number of cash advances written at pawn locations (not in thousands): By the Company 50,268 43,140 By third-party lenders (b) (d) 98,126 107,987 --------- --------- Aggregate number of cash advances written at pawn locations (b) (f) 148,394 151,127 ========= ========= Cash advance customer balances due at pawn locations (gross): Owned by Company (c) $6,439 $5,709 Owned by third-party lenders (b) 7,800 8,015 --------- --------- Aggregate cash advance customer balances due (gross) at pawn locations (b) (f) $14,239 $13,724 ========= ========= CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES FINANCIAL AND OPERATING DATA (Continued) ($ in thousands unless otherwise noted) Three Months Ended March 31, -------------------- 2007 2006 ---------- --------- CASH ADVANCE OPERATIONS (e): Amount of cash advances written: Funded by the Company $286,250 $121,581 Funded by third-party lenders (b) (d) 97,103 33,336 ---------- --------- Aggregate amount of cash advances written (b) (f) $383,353 $154,917 ========== ========= Number of cash advances written (not in thousands): By the Company 758,266 344,498 By third-party lenders (b) (d) 178,100 67,505 ---------- --------- Aggregate number of cash advances written (b) (f) 936,366 412,003 ========== ========= Cash advance customer balances due (gross): Owned by Company (c) $84,086 $27,571 Owned by third-party lenders (b) 17,222 6,584 ---------- --------- Aggregate cash advance customer balances due (gross) (b) (f) $101,308 $34,155 ========== ========= Cash advance locations in operation (excluding online lending) - Beginning of period 295 286 Start-ups 2 3 Combined or closed (1) (3) ---------- --------- End of period 296 286 ========== ========= Average number of cash advance locations in operation 295 286 ========== ========= Number of states with online lending at end of period 30 - CONSOLIDATED CASH ADVANCE PRODUCT SUMMARY (a) (b) (e): Amount of cash advances written: Funded by the Company $301,736 $135,890 Funded by third-party lenders (b) (d) 142,088 78,040 ---------- --------- Aggregate amount of cash advances written (b) (f) $443,824 $213,930 ========== ========= Number of cash advances written (not in thousands): By the Company 808,534 387,638 By third-party lenders (b) (d) 276,226 175,492 ---------- --------- Aggregate number of cash advances written (b) (f) 1,084,760 563,130 ========== ========= Average amount per cash advance written (not in thousands): Funded by the Company $373 $351 Funded by third-party lenders (b) (d) 514 445 ---------- --------- Aggregate average amount per cash advance (b) (f) $409 $380 ========== ========= Cash advance customer balances due (gross): Owned by Company (c) $90,525 $33,280 Owned by third-party lenders (b) 25,022 14,599 ---------- --------- Aggregate cash advance customer balances due (gross) (b) (f) $115,547 $47,879 ========== ========= Total locations offering cash advances at end of period (excluding online lending) 722 717 Average total locations offering cash advances (excluding online lending) 720 719 Number of states with online lending at end of period 30 - CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES FINANCIAL AND OPERATING DATA (Continued) ($ in thousands unless otherwise noted) Three Months Ended March 31, ------------------- 2007 2006 --------- --------- CHECK CASHING OPERATIONS (Mr. Payroll): Centers in operation at end of period: Company-owned locations 5 5 Franchised locations 135 135 --------- --------- Combined centers in operation at end of period 140 140 ========= ========= Revenue from Company-owned locations $161 $182 Revenue from franchise royalties and other 979 969 --------- --------- Total revenue (c) $1,140 $1,151 ========= ========= Face amount of checks cashed: Company-owned locations $9,610 $10,493 Franchised locations (b) 367,221 365,686 --------- --------- Combined face amount of check cashed (b) $376,831 $376,179 ========= ========= Fees collected from customers: Company-owned locations $161 $182 Franchised locations (b) 5,446 5,490 --------- --------- Combined fees collected from customers (b) $5,607 $5,672 ========= ========= Fees as a percentage of check cashed: Company-owned locations 1.7 % 1.7 % Franchised locations (b) 1.5 1.5 --------- --------- Combined fees as a percentage of check cashed (b) 1.5 % 1.5 % ========= ========= Average check cashed (not in thousands): Company-owned locations $428 439 Franchised locations (b) 494 477 --------- --------- Combined average check cashed (b) $492 $476 ========= ========= ------------------------------------------------- (a) Includes cash advance activities at the Company's pawn lending locations. (b) Non-GAAP presentation. For informational purposes and to provide a greater understanding of the Company's businesses. Management believes that information provided with this level of detail is meaningful and useful in understanding the activities and business metrics of the Company's operations. (c) Amounts recorded in the Company's consolidated financial statements. (d) Cash advances written by third-party lenders that were arranged by the Company on behalf of the third-party lenders. (e) Includes cash advance activities at the Company's cash advance locations and through the Company's internet distribution channel. (f) Includes (i) cash advances written by the Company, and (ii) cash advances written by third-party lenders that were arranged by the Company on behalf of the third-party lenders. CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED CASH ADVANCES OUTSTANDING (in thousands) March 31, ----------------- 2007 2006 -------- -------- Funded by the Company (a) Active cash advances and fees receivable $57,077 $24,677 Cash advances and fees in collection 21,436 4,479 -------- -------- Total funded by the Company (a) 78,513 29,156 -------- -------- Funded by the third-party lenders (b) (c) Active cash advances and fees receivable 25,024 15,440 Cash advances and fees in collection 12,010 3,283 -------- -------- Total funded by third-party lenders (b) (c) 37,034 18,723 -------- -------- Combined gross portfolio (b) (d) 115,547 47,879 Less: Elimination of cash advances owned by third- party lenders 25,022 14,599 Less: Discount on cash advances assigned by third- party lenders - 35 -------- -------- Company-owned cash advances and fees receivable, gross 90,525 33,245 Less: Allowance for losses 23,141 3,541 -------- -------- Cash advances and fees receivable, net $67,384 $29,704 ======== ======== Allowance for loss on Company-owned cash advances $23,141 $3,541 Accrued losses on third-party lender owned cash advances 1,253 605 -------- -------- Combined allowance for losses and accrued third- party lender losses $24,394 $4,146 ======== ======== Allowance for Company-owned cash advances Balance at beginning of period $19,513 $6,309 Cash advance loss provision 32,648 4,706 Charge-offs (32,511) (11,045) Recoveries 3,491 3,571 -------- -------- Balance at end of period $23,141 $3,541 ======== ======== Accrual for third-party lender-owned cash advances Balance at beginning of period $1,153 $874 Increase (decrease) in loss provision 100 (269) -------- -------- Balance at end of period $1,253 $605 ======== ======== Combined statistics (b) Combined cash advance loss provision $32,748 $4,437 Combined cash advance loss provision as a % of combined cash advances written 7.4 % 2.1 % Charge-offs (net of recoveries) as a % of combined cash advances written 6.5 % 3.5 % Combined allowance for losses and accrued third- party lenders losses as a % of combined gross portfolio 21.1 % 8.7 % --------------------------------------------------- (a) Cash advances written by the Company in its pawn and cash advance locations and through the Company's internet distribution channel. (b) Non-GAAP presentation. For informational purposes and to provide a greater understanding of the Company's businesses. Management believes that information provided with this level of detail is meaningful and useful in understanding the activities and business metrics of the Company's operations. (c) Cash advances written by third-party lenders that were arranged by the Company on behalf of the third-party lenders, all at the Company's pawn and cash advance locations and through the Company's internet distribution channel. (d) Includes (i) cash advances written by the Company, and (ii) cash advances written by third-party lenders that were arranged by the Company on behalf of the third-party lenders, all at the Company's pawn and cash advance locations and through the Company's internet distribution channel. CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES INCOME FROM OPERATIONS BY OPERATING SEGMENT THREE MONTHS ENDED MARCH 31, 2007 AND 2006 (in thousands) Pawn Cash Check Lending Advance Cashing Consolidated --------- --------- ------- ------------ Three Months Ended March 31, 2007: ----------------------------- Revenue Finance and service charges $38,431 $ - $ - $38,431 Proceeds from disposition of merchandise 100,168 - - 100,168 Cash advance fees 10,120 68,396 - 78,516 Check cashing fees, royalties and other 929 3,683 1,140 5,752 --------- --------- ------- ------------ Total revenue 149,648 72,079 1,140 222,867 Cost of revenue - disposed merchandise 61,925 - - 61,925 --------- --------- ------- ------------ Net revenue 87,723 72,079 1,140 160,942 --------- --------- ------- ------------ Expenses Operations 47,116 24,944 307 72,367 Cash advance loss provision 2,844 29,904 - 32,748 Administration 9,321 4,697 277 14,295 Depreciation and amortization 5,007 2,426 101 7,534 --------- --------- ------- ------------ Total expenses 64,288 61,971 685 126,944 --------- --------- ------- ------------ Income (loss) from operations $23,435 $10,108 $455 $33,998 ========= ========= ======= ============ As of March 31, 2007: ----------------------------- Total assets $526,088 $214,648 $7,150 $747,886 ========= ========= ======= ============ Goodwill $142,052 $91,474 $5,310 $238,836 ========= ========= ======= ============ Three Months Ended March 31, 2006: ----------------------------- Revenue Finance and service charges $35,055 $ - $ - $35,055 Proceeds from disposition of merchandise 87,124 - - 87,124 Cash advance fees 9,648 25,791 - 35,439 Check cashing fees, royalties and other 687 3,499 1,151 5,337 --------- --------- ------- ------------ Total revenue 132,514 29,290 1,151 162,955 Cost of revenue - disposed merchandise 52,742 - - 52,742 --------- --------- ------- ------------ Net revenue 79,772 29,290 1,151 110,213 --------- --------- ------- ------------ Expenses Operations 44,217 14,722 334 59,273 Cash advance loss provision 1,883 2,554 - 4,437 Administration 8,470 5,068 313 13,851 Depreciation and amortization 4,342 1,930 81 6,353 --------- --------- ------- ------------ Total expenses 58,912 24,274 728 83,914 --------- --------- ------- ------------ Income from operations $20,860 $5,016 $423 $26,299 ========= ========= ======= ============ As of March 31, 2006: ----------------------------- Total assets $453,214 $105,264 $7,090 $565,568 ========= ========= ======= ============ Goodwill $125,668 $44,618 $5,310 $175,596 ========= ========= ======= ============ CONTACT: Cash America International, Inc. Thomas A. Bessant, Jr., 817-335-1100