EX-99.1 2 a5528592ex99_1.txt EXHIBIT 99.1 Exhibit 99.1 Cash America Reports a 31% Increase in Third Quarter Net Income Per Share from Continuing Operations and Declares Regular Dividend FORT WORTH, Texas--(BUSINESS WIRE)--Oct. 25, 2007--Cash America International, Inc. (NYSE:CSH) announced today that net income for the third quarter of 2007 was $20,616,000 (68 cents per share). The third quarter results include a pre-tax gain of $6.3 million (13 cents per share after taxes) from the Company's sale of its notes receivable and its rights to acquire a minority ownership position in an overseas pawn lending business, Svensk Pantbelaning. Excluding the gain from the sale, the Company generated a 31% increase in earnings per share as net income increased to $16,560,000 (55 cents per share) during the third quarter 2007 compared to $12,941,000 (42 cents per share) reported in the same period of 2006. Total revenue increased 40% during the third quarter 2007 to $231.5 million, up from $165.9 million during the same period in 2006. The primary contributor to the increase in total revenue was a 97% increase in cash advance fees, which were $95.4 million during the third quarter 2007, compared to $48.4 million during the same period in 2006. The growth in cash advance fees is predominantly attributed to the continued expansion of the number of customers accessing credit using the Company's online distribution channel for the product. Also contributing to the increase in total revenue was a 14% increase in revenue related to pawn lending operations, including a 23% increase in sales from the disposition of merchandise and a 5% increase in fees and service charges on pawn loans. For the first nine months of fiscal year 2007, Cash America produced a 30% increase in net income excluding one-time gains, of $49,003,000 ($1.61 per share) compared to $37,833,000 ($1.24 per share) in the same period of the prior year. The 2006 year-to-date net income excludes a $1.4 million (5 cents per share) after-tax gain on proceeds from a lease contract that was terminated during the second quarter of that year. Driving the year-over-year net income gain was a 40% increase in total revenue to $668.3 million for the nine-month period ended September 2007 up from $478.8 million for the same period in 2006. Commenting on the results for the third quarter, Daniel R. Feehan, President and Chief Executive Officer, said, "We are pleased to see the strong year-over-year growth in revenue in each of our businesses during the third quarter. In addition, during the quarter we began to experience a slight improvement in sequential loss rates on our cash advance loan portfolio as the mix of first time customers using our online platform moderated as a percent of total customers. This natural progression allowed us to begin to demonstrate the opportunity for the growth in earnings and marginal profitability that we anticipated from this distribution platform. We are pleased to see continued growth in this service alternative for our cash advance customers. In addition, we enjoyed another successful quarter from our pawn lending activities led by a 20% increase in gross profit from the disposition of merchandise on strong sales activities during the period." Cash America will conduct a conference call to discuss its third quarter earnings Thursday, October 25, 2007 at 3:45 PM CDT. A live web cast of the call will be available on the Company's corporate web site in the Investor Relations section (www.cashamerica.com). To listen to the live call, please go to the web site at least fifteen minutes early to register, download, and install any necessary audio software. Additionally, the Company announced that the Board of Directors, at its regularly scheduled quarterly meeting, declared a $0.035 (3.5 cents) per share cash dividend on common stock outstanding. The dividend will be paid to shareholders of record on November 7, 2007, and will be paid at the close of business on November 21, 2007. Outlook for the Fourth Quarter of 2007 and Related Fiscal Year Expectations for the remainder of fiscal 2007 will be impacted by earning asset levels based on customer demand for credit products and by customer demand for the sale of merchandise in pawn locations. Other elements expected to affect the growth in revenue include the ongoing maturation of the 169 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. Based on its views and expectations related to the preceding factors management expects that the fourth quarter 2007 net income per share will be between 84 and 94 cents per share compared to 71 cents per share in the fourth quarter 2006. Therefore, management's expectation for the full year 2007 earnings per share will be between $2.45 and $2.55 compared to $1.95 per share in fiscal 2006. These full year results exclude the pre-tax gain of $6.3 million (13 cents per share after taxes) in the third quarter 2007 and the $1.4 million after-tax gain (5 cents per share) in the second quarter of 2006. In addition, management is initiating its preliminary expectations for fiscal year 2008 with an anticipated range of earnings per share of 2.85 to $3.05. Cash America International, Inc. is a provider of specialty financial services to individuals in the United States with 936 total locations. Cash America is the largest provider of secured non-recourse loans to individuals, commonly referred to as pawn loans, through 495 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 301 locations that offer this service under the brand names Cash America Payday Advance and Cashland. Short-term cash advances are also offered over the Internet to customers in 31 states in the United States and the United Kingdom at http://www.cashnetusa.com and http://www.quickquid.co.uk, respectively. In addition, check cashing services are provided through its 140 franchised and Company-owned "Mr. Payroll" check cashing centers. For additional information regarding the Company and the services it provides, visit the Company's websites located at: http://www.cashamerica.com http://www.cashnetusa.com http://www.cashlandloans.com http://www.quickquid.co.uk 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 continued acceptance of the online distribution channel by the Company's cash advance customers, 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 foreign currency exchange rates, changes in the capital markets, changes in tax and other laws and governmental rules and regulations applicable to the Company's businesses, 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 Nine Months Ended September 30, September 30, ----------------- ----------------- 2007 2006 2007 2006 -------- -------- -------- -------- Consolidated Operations: Total revenue $231,512 $165,917 $668,265 $478,800 Net revenue $173,819 $119,636 $495,863 $336,891 Total operating expenses $143,022 $ 96,292 $408,034 $270,165 Income from operations $ 30,797 $ 23,344 $ 87,829 $ 66,726 Income before income taxes $ 32,829 $ 20,684 $ 83,032 $ 62,330 Net Income $ 20,616 $ 12,941 $ 53,059 $ 39,242 Earnings per share: Basic $ 0.70 $ 0.44 $ 1.78 $ 1.32 Diluted $ 0.68 $ 0.42 $ 1.74 $ 1.29 Weighted average shares: Basic 29,535 29,707 29,745 29,652 Diluted 30,235 30,548 30,464 30,515 CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share data) December September 30, 31, ------------------- 2007 2006 2006 --------- --------- --------- (Unaudited) Assets Current assets: Cash and cash equivalents $ 26,412 $ 30,241 $ 25,723 Pawn loans 136,722 133,734 127,384 Cash advances, net 82,785 70,253 79,975 Merchandise held for disposition, net 98,751 83,179 87,060 Finance and service charges receivable 25,528 23,846 25,377 Other receivables and prepaid expenses 15,349 11,539 16,128 Deferred tax assets 22,455 14,657 16,324 --------- --------- --------- Total current assets 408,002 367,449 377,971 Property and equipment, net 147,813 110,983 119,261 Goodwill 283,554 193,379 238,499 Intangible assets, net 24,569 27,078 27,477 Other assets 3,017 12,296 13,036 --------- --------- --------- Total assets $866,955 $711,185 $776,244 ========= ========= ========= Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued expenses $104,784 $ 52,045 $ 91,217 Customer deposits 8,211 7,470 7,464 Income taxes currently payable 16 2,456 2,691 Current portion of long-term debt 12,786 16,786 16,786 --------- --------- --------- Total current liabilities 125,797 78,757 118,158 Deferred tax liabilities 15,854 11,688 12,770 Other liabilities 1,621 1,578 1,625 Long-term debt 251,427 200,617 202,963 --------- --------- --------- Total liabilities 394,699 292,640 335,516 --------- --------- --------- 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 162,837 160,234 161,683 Retained earnings 337,909 267,004 287,962 Accumulated other comprehensive income (loss) (4) 21 20 Notes receivable secured by common stock -- (382) (18) Treasury shares, at cost (1,088,493 shares, 682,800 shares and 565,840 shares at September 30, 2007 and 2006, and December 31, 2006, respectively) (31,510) (11,356) (11,943) --------- --------- --------- Total stockholders' equity 472,256 418,545 440,728 --------- --------- --------- Total liabilities and stockholders' equity $866,955 $711,185 $776,244 ========= ========= ========= CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, ------------------- ------------------- 2007 2006 2007 2006 --------- --------- --------- --------- (Unaudited) Revenue Finance and service charges $ 41,386 $ 39,404 $117,011 $109,047 Proceeds from disposition of merchandise 91,366 74,426 277,342 234,172 Cash advance fees 95,417 48,401 260,880 123,235 Check cashing fees, royalties and other 3,343 3,686 13,032 12,346 --------- --------- --------- --------- Total Revenue 231,512 165,917 668,265 478,800 Cost of Revenue Disposed merchandise 57,693 46,281 172,402 141,909 --------- --------- --------- --------- Net Revenue 173,819 119,636 495,863 336,891 Expenses Operations 74,695 58,263 221,672 177,178 Cash advance loss provision 43,612 17,503 118,688 32,738 Administration 16,450 13,580 43,976 40,447 Depreciation and amortization 8,265 6,946 23,698 19,802 --------- --------- --------- --------- Total Expenses 143,022 96,292 408,034 270,165 --------- --------- --------- --------- Income from Operations 30,797 23,344 87,829 66,726 Interest expense (4,378) (3,162) (12,119) (8,010) Interest income 145 435 999 1,202 Foreign currency transaction gain 5 67 63 245 Gain from termination of contract -- -- -- 2,167 Gain on sale of foreign notes 6,260 -- 6,260 -- --------- --------- --------- --------- Income before Income Taxes 32,829 20,684 83,032 62,330 Provision for income taxes 12,213 7,743 29,973 23,088 --------- --------- --------- --------- Net Income $ 20,616 $ 12,941 $ 53,059 $ 39,242 ========= ========= ========= ========= Earnings Per Share: Basic $ 0.70 $ 0.44 $ 1.78 $ 1.32 Diluted $ 0.68 $ 0.42 $ 1.74 $ 1.29 Weighted average common shares outstanding: Basic 29,535 29,707 29,745 29,652 Diluted 30,235 30,548 30,464 30,515 Dividends declared per common share $ 0.035 $ 0.025 $ 0.105 $ 0.075 CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES FINANCIAL AND OPERATING DATA ($ in thousands unless otherwise noted) Three Months Ended Nine Months Ended September 30, September 30, --------------------- ------------------- 2007 2006 2007 2006 ----------- --------- --------- --------- PAWN LENDING OPERATIONS: Pawn loans Annualized yield on pawn loans 121.4% 119.3% 124.1% 123.3% Total amount of pawn loans written and renewed $138,100 $129,269 $378,058 $357,170 Average pawn loan balance outstanding $135,205 $131,089 $126,043 $118,297 Average pawn loan balance per average location in operation $ 281 $ 284 $ 263 $ 258 Ending pawn loan balance per location in operation $ 283 $ 289 $ 283 $ 289 Average pawn loan amount at end of period (not in thousands) $ 102 $ 100 $ 105 $ 100 Profit margin on disposition of merchandise as a percentage of proceeds from disposition of merchandise 36.9% 37.8% 37.8% 39.4% Average annualized merchandise turnover 2.5x 2.4x 2.7x 2.6x Average balance of merchandise held for disposition per average location in operation $ 192 $ 167 $ 182 $ 157 Ending balance of merchandise held for disposition per location in operation $ 204 $ 180 $ 204 $ 180 Pawnshop locations in operation - Beginning of period, owned 480 457 475 456 Acquired 2 5 5 7 Start-ups 1 1 4 2 Combined or closed -- -- (1) (2) ----------- --------- --------- --------- End of period, owned 483 463 483 463 Franchise locations at end of period 12 11 12 11 ----------- --------- --------- --------- Total pawnshop locations at end of period 495 474 495 474 =========== ========= ========= ========= Average number of owned pawnshop locations 482 462 479 459 =========== ========= ========= ========= Cash advances (a) Pawn locations offering cash advances at end of period 429 417 429 417 Average number of pawn locations offering cash advances 427 416 425 423 Amount of cash advances written at pawn locations: Funded by the Company $ 16,652 $ 18,978 $ 48,899 $ 49,113 Funded by third-party lenders (b) (d) 49,634 57,062 141,510 151,673 ----------- --------- --------- --------- Aggregate amount of cash advances written at pawn locations(b) (f) $ 66,286 $ 76,040 $190,409 $200,786 =========== ========= ========= ========= Number of cash advances written at pawn locations (not in thousands): By the Company 54,821 61,516 160,253 154,545 By third-party lenders (b) (d) 105,873 129,176 308,729 355,651 ----------- --------- --------- --------- Aggregate number of cash advances written at pawn locations(b) (f) 160,694 190,692 468,982 510,196 =========== ========= ========= ========= Cash advance customer balances due at pawn locations (gross): Owned by Company (c) $ 8,803 $ 8,779 $ 8,803 $ 8,779 Owned by third-party lenders (b) (d) 9,179 10,474 9,179 10,474 ----------- --------- --------- --------- Aggregate cash advance customer balances due at pawn locations (gross) (b) (f) $ 17,982 $ 19,253 $ 17,982 $ 19,253 =========== ========= ========= --------- CASH AMERICA INTERNATIONAL, INC., AND SUBSIDIARIES FINANCIAL AND OPERATING DATA (Continued) ($ in thousands unless otherwise noted) Three Months Ended Nine Months Ended September 30, September 30, ------------------ ----------------------- 2007 2006 2007 2006 --------- -------- ----------- ----------- CASH ADVANCE OPERATIONS (e): Storefront operations: Amount of cash advances written: Funded by the Company $187,302 $168,743 $ 522,719 $ 431,569 Funded by third-party lenders (b) (d) 30,212 34,899 84,884 103,995 --------- -------- ----------- ----------- Aggregate amount of cash advances written (b) (f) $217,514 $203,642 $ 607,603 $ 535,564 ========= ======== =========== =========== Number of cash advances written (not in thousands): By the Company 513,135 482,560 1,438,490 1,235,431 By third-party lenders (b) (d) 55,090 66,098 159,427 204,114 --------- -------- ----------- ----------- Aggregate number of cash advances written (b) (f) 568,225 548,658 1,597,917 1,439,545 ========= ======== =========== =========== Cash advance customer balances due (gross): Owned by the Company (c) $ 51,316 $ 46,642 $ 51,316 $ 46,642 Owned by third-party lenders (b) (d) 5,259 5,916 5,259 5,916 --------- -------- ----------- ----------- Aggregate cash advance customer balances due (gross) (b) (f) $ 56,575 $ 52,558 $ 56,575 $ 52,558 ========= ======== =========== =========== Cash advance locations in operation (excluding online lending) - Beginning of period 296 291 295 286 Start-ups 7 2 10 10 Combined or closed (2) -- (4) (3) --------- -------- ----------- ----------- End of period 301 293 301 293 ========= ======== =========== =========== Average number of cash advance locations 299 292 297 289 ========= ======== =========== =========== Internet lending operations: Amount of cash advances written: Funded by the Company $157,887 $ 15,625 $ 435,665 $ 15,625 Funded by third-party lenders (b) (d) 96,096 -- 251,880 -- --------- -------- ----------- ----------- Aggregate amount of cash advances written (b) (f) $253,983 $ 15,625 $ 687,545 $ 15,625 ========= ======== =========== =========== Number of cash advances written (not in thousands): By the Company 400,942 40,480 1,117,466 40,480 By third-party lenders (b) (d) 159,711 -- 441,402 -- --------- -------- ----------- ----------- Aggregate number of cash advances written (b) (f) 560,653 40,480 1,558,868 40,480 ========= ======== =========== =========== Cash advance customer balances due (gross): Owned by the Company (c) $ 53,591 $ 25,921 $ 53,591 $ 25,921 Owned by third-party lenders (b) (d) 16,631 -- 16,631 -- --------- -------- ----------- ----------- Aggregate cash advance customer balances due (gross) (b) (f) $ 70,222 $ 25,921 $ 70,222 $ 25,921 ========= ======== =========== =========== Number of states with online lending at end of period 31 27 31 27 Number of countries with online lending at end of period 2 1 2 1 CASH AMERICA INTERNATIONAL, INC., AND SUBSIDIARIES FINANCIAL AND OPERATING DATA (Continued) ($ in thousands unless otherwise noted) Three Months Ended Nine Months Ended September 30, September 30, ------------------- --------------------- 2007 2006 2007 2006 ---------- -------- ---------- ---------- Combined Storefront and Internet lending operations: Amount of cash advances written: Funded by the Company $ 345,189 $184,368 $ 958,384 $ 447,194 Funded by third-party lenders (b) (d) 126,308 34,899 336,764 103,995 ---------- -------- ---------- ---------- Aggregate amount of cash advances written (b) (f) $ 471,497 $219,267 $1,295,148 $ 551,189 ========== ======== ========== ========== Number of cash advances written (not in thousands): By the Company 914,077 523,040 2,555,956 1,275,911 By third-party lenders (b) (d) 214,801 66,098 600,829 204,114 ---------- -------- ---------- ---------- Aggregate number of cash advances written (b) (f) 1,128,878 589,138 3,156,785 1,480,025 ========== ======== ========== ========== Cash advance customer balances due (gross): Owned by the Company (c) $ 104,907 $ 72,563 $ 104,907 $ 72,563 Owned by third-party lenders (b) (d) 21,890 5,916 21,890 5,916 ---------- -------- ---------- ---------- Aggregate cash advance customer balances due (gross) (b) (f) $ 126,797 $ 78,479 $ 126,797 $ 78,479 ========== ======== ========== ========== CONSOLIDATED CASH ADVANCE PRODUCT SUMMARY (a) (b) (e): Amount of cash advances written: Funded by the Company $ 361,841 $203,346 $1,007,283 $ 496,307 Funded by third-party lenders (b) (d) 175,942 91,961 478,274 255,668 ---------- -------- ---------- ---------- Aggregate amount of cash advances written (b) (f) $ 537,783 $295,307 $1,485,557 $ 751,975 ========== ======== ========== ========== Number of cash advances written (not in thousands): By the Company 968,898 584,556 2,716,209 1,430,456 By third-party lenders (b) (d) 320,674 195,274 909,558 559,765 ---------- -------- ---------- ---------- Aggregate number of cash advances written (b) (f) 1,289,572 779,830 3,625,767 1,990,221 ========== ======== ========== ========== Average amount per cash advance written (not in thousands): Funded by the Company $ 373 $ 348 $ 371 $ 347 Funded by third-party lenders (b) (d) 549 471 526 474 ---------- -------- ---------- ---------- Aggregate average amount per cash advance (b) (f) $ 417 $ 379 $ 410 $ 382 ========== ======== ========== ========== Cash advance customer balances due (gross): Owned by the Company (c) $ 113,710 $ 81,342 $ 113,710 $ 81,342 Owned by third-party lenders (b) (d) 31,069 16,390 31,069 16,390 ---------- -------- ---------- ---------- Aggregate cash advance customer balances due (gross) (b) (f) $ 144,779 $ 97,732 $ 144,779 $ 97,732 ========== ======== ========== ========== Total locations offering cash advances at end of period (excluding online lending) 730 710 730 710 Average total locations offering cash advances (excluding online lending) 726 708 722 712 Number of states with online lending at end of period 31 27 31 27 Number of countries with online lending at end of period 2 1 2 1 CASH AMERICA INTERNATIONAL, INC., AND SUBSIDIARIES FINANCIAL AND OPERATING DATA (Continued) ($ in thousands unless otherwise noted) Three Months Ended Nine Months Ended September 30, September 30, --------------------- ------------------- 2007 2006 2007 2006 ----------- --------- --------- --------- CHECK CASHING OPERATIONS (Mr. Payroll): Centers in operation at end of year (not in thousands): Company-owned locations 5 5 5 5 Franchised locations (b) 135 133 135 133 ----------- --------- --------- --------- Combined centers in operations at end of year (b) 140 138 140 138 =========== ========= ========= ========= Revenue from Company-owned locations $ 106 $ 126 $ 379 $ 442 Revenue from franchise royalties and other 561 582 1,902 1,949 ----------- --------- --------- --------- Total revenue (c) $ 667 $ 708 $ 2,281 $ 2,391 =========== ========= ========= ========= Face amount of checks cashed: Company-owned locations $ 7,902 $ 9,196 $ 25,724 $ 29,191 Franchised locations (b) 291,255 302,366 958,277 968,963 ----------- --------- --------- --------- Combined face amount of checks cashed (b) $299,157 $311,562 $984,001 $998,154 =========== ========= ========= ========= Fees collected from customers: Company-owned locations (c) $ 106 $ 124 $ 379 $ 442 Franchised locations (b) 3,968 4,140 13,544 13,774 ----------- --------- --------- --------- Combined fees collected from customers (b) $ 4,074 $ 4,264 $ 13,923 $ 14,216 =========== ========= ========= ========= Fees as a percentage of checks cashed: Company-owned locations 1.3% 1.4% 1.5% 1.5% Franchised locations (b) 1.4 1.4 1.4 1.4 ----------- --------- --------- --------- Combined fees as a percentage of checks cashed (b) 1.4% % 1.4% 1.4% 1.4% =========== ========= ========= ========= Average check cashed (not in thousands): Company-owned locations $ 375 $ 379 $ 396 $ 400 Franchised locations (b) 416 402 442 426 ----------- --------- --------- --------- Combined average check cashed (b) $ 415 $ 401 $ 441 $ 425 =========== ========= ========= ========= (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 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 storefront 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 AND RELATED ALLOWANCE FOR LOSSES (in thousands) September 30, ---------------- 2007 2006 -------- ------- Funded by the Company (b) Active cash advances and fees receivable $ 69,005 $54,741 Cash advances and fees in collection 28,817 20,146 -------- ------- Total funded by the Company (b) 97,822 74,887 -------- ------- Funded by third-party lenders (a) (c) Active cash advances and fees receivable 31,069 17,072 Cash advances and fees in collection 15,888 5,773 -------- ------- Total funded by third-party lenders (a) (c) 46,957 22,845 -------- ------- Combined gross portfolio (a) (d) 144,779 97,732 Less: Elimination of cash advances owned by third- party lenders 31,069 16,390 -------- ------- Company-owned cash advances and fees receivable, gross 113,710 81,342 Less: Allowance for losses 30,925 11,089 -------- ------- Cash advances and fees receivable, net $ 82,785 $70,253 ======== ======= Three Months Ended Nine Months Ended September 30, September 30, ------------------- -------------------- 2007 2006 2007 2006 --------- --------- ---------- --------- Allowance for company-owned cash advances Balance at beginning of period $ 32,173 $ 7,541 $ 19,513 $ 6,309 Cash advance loss provision 43,604 17,641 118,011 32,859 Charge-offs (48,283) (16,266) (117,133) (35,924) Recoveries 3,431 2,173 10,534 7,845 --------- --------- ---------- --------- Balance at end of period $ 30,925 $ 11,089 $ 30,925 $ 11,089 ========= ========= ========== ========= Accrual for third-party lender-owned cash advances Balance at beginning of period $ 1,824 $ 891 $ 1,155 $ 874 Increase (decrease) in loss provision 8 (138) 677 (121) --------- --------- ---------- --------- Balance at end of period $ 1,832 $ 753 $ 1,832 $ 753 ========= ========= ========== ========= Combined statistics (d) Combined cash advance loss provision $ 43,612 $ 17,503 $ 118,688 $ 32,738 ========= ========= ========== ========= Combined cash advance loss provision as a % of combined cash advances written (a) 8.1% 5.9% 8.0% 4.4% ========= ========= ========== ========= Charge-offs (net of recoveries) as a % of combined cash advances written (a) 8.3% 4.8% 7.2% 3.7% ========= ========= ========== ========= Combined allowance for losses and accrued third- party lender losses as a % of combined gross portfolio (a) 22.6% 12.1% 22.6% 12.1% ========= ========= ========== ========= (a) Non-GAAP presentation. For informational purposes and to provide a greater understanding of the Company's businesses. Management believes information provided with this level of detail is meaningful and useful in understanding the activities and business metrics of the Company's operations. (b) Cash advances written by the Company in its pawn and cash advance locations and through the Company's Internet distribution channel. (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 SEPTEMBER 30, 2007 AND 2006 (in thousands) Cash Pawn Advance Check Lending (1) Cashing Consolidated -------- -------- -------- ------------ Three Months Ended September 30, 2007: ------------------------------ Revenue Finance and service charges $ 41,386 $ -- $ -- $ 41,386 Proceeds from disposition of merchandise 91,366 -- -- 91,366 Cash advance fees 11,301 84,116 -- 95,417 Check cashing fees, royalties and other 698 1,826 819 3,343 -------- -------- -------- ------------ Total revenue 144,751 85,942 819 231,512 Cost of revenue - disposed merchandise 57,693 -- -- 57,693 -------- -------- -------- ------------ Net revenue 87,058 85,942 819 173,819 -------- -------- -------- ------------ Expenses Operations 46,955 27,461 279 74,695 Cash advance loss provision 4,973 38,639 -- 43,612 Administration 9,587 6,632 231 16,450 Depreciation and amortization 5,272 2,901 92 8,265 -------- -------- -------- ------------ Total expenses 66,787 75,633 602 143,022 -------- -------- -------- ------------ Income from operations $ 20,271 $ 10,309 $ 217 $ 30,797 ======== ======== ======== ============ As of September 30, 2007: ------------------------------ Total assets $582,072 $277,986 $6,897 $866,955 ======== ======== ======== ============ Goodwill $143,665 $134,579 $5,310 $283,554 ======== ======== ======== ============ Three Months Ended September 30, 2006: ------------------------------ Revenue Finance and service charges $ 39,404 $ -- $ -- $ 39,404 Proceeds from disposition of merchandise 74,426 -- -- 74,426 Cash advance fees 11,963 36,438 -- 48,401 Check cashing fees, royalties and other 743 1,887 1,056 3,686 -------- -------- -------- ------------ Total revenue 126,536 38,325 1,056 165,917 Cost of revenue - disposed merchandise 46,281 -- -- 46,281 -------- -------- -------- ------------ Net revenue 80,255 38,325 1,056 119,636 -------- -------- -------- ------------ Expenses Operations 43,148 14,788 327 58,263 Cash advance loss provision 5,934 11,569 -- 17,503 Administration 8,164 5,118 298 13,580 Depreciation and amortization 4,748 2,107 91 6,946 -------- -------- -------- ------------ Total expenses 61,994 33,582 716 96,292 -------- -------- -------- ------------ Income from operations $ 18,261 $ 4,743 $ 340 $ 23,344 ======== ======== ======== ============ As of September 30, 2006: ------------------------------ Total assets $529,258 $174,621 $7,306 $711,185 ======== ======== ======== ============ Goodwill $132,142 $ 55,927 $5,310 $193,379 ======== ======== ======== ============ CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES INCOME FROM OPERATIONS BY OPERATING SEGMENT NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006 (in thousands) Cash Nine Months Ended September Pawn Advance Check 30, 2007: Lending (1) Cashing Consolidated ------------------------------ -------- -------- -------- ------------ Revenue Finance and service charges $117,011 $ -- $ -- $117,011 Proceeds from disposition of merchandise 277,342 -- -- 277,342 Cash advance fees 31,411 229,469 -- 260,880 Check cashing fees, royalties and other 2,438 7,777 2,817 13,032 -------- -------- -------- ------------ Total revenue 428,202 237,246 2,817 668,265 Cost of revenue - disposed merchandise 172,402 -- -- 172,402 -------- -------- -------- ------------ Net revenue 255,800 237,246 2,817 495,863 -------- -------- -------- ------------ Expenses Operations 140,654 80,074 944 221,672 Cash advance loss provision 11,542 107,146 -- 118,688 Administration 25,894 17,326 756 43,976 Depreciation and amortization 15,406 7,998 294 23,698 -------- -------- -------- ------------ Total expenses 193,496 212,544 1,994 408,034 -------- -------- -------- ------------ Income from operations $ 62,304 $ 24,702 $ 823 $ 87,829 ======== ======== ======== ============ Nine Months Ended September 30, 2006: ------------------------------ Revenue Finance and service charges $109,047 $ -- $ -- $109,047 Proceeds from disposition of merchandise 234,172 -- -- 234,172 Cash advance fees 31,893 91,342 -- 123,235 Check cashing fees, royalties and other 2,046 7,220 3,080 12,346 -------- -------- -------- ------------ Total revenue 377,158 98,562 3,080 478,800 Cost of revenue - disposed merchandise 141,909 -- -- 141,909 -------- -------- -------- ------------ Net revenue 235,249 98,562 3,080 336,891 -------- -------- -------- ------------ Expenses Operations 132,164 44,033 981 177,178 Cash advance loss provision 11,541 21,197 -- 32,738 Administration 24,396 14,872 1,179 40,447 Depreciation and amortization 13,568 5,973 261 19,802 -------- -------- -------- ------------ Total expenses 181,669 86,075 2,421 270,165 -------- -------- -------- ------------ Income from operations $ 53,580 $ 12,487 $ 659 $ 66,726 ======== ======== ======== ============ CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES INCOME FROM OPERATIONS BY OPERATING SEGMENT THREE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006 (in thousands) (1) The Cash Advance segment is comprised of two distribution channels for the same product, a multi-unit, "storefront" platform of 301 units and an on-line, internet based lending platform. The amounts for the three and nine months ended September 30, 2006 include 15 days of activity, as the internet based lending platform was purchased on September 15, 2006. The following table summarizes the results from each channel's contributions to the Cash Advance segment as of September 30, 2007: Total Internet Cash Three Months Ended September 30, 2007: Storefront Lending Advance ----------------------------------------- ---------- -------- -------- Revenue Cash advance fees $ 34,249 $ 49,867 $ 84,116 Check cashing fees, royalties and other 1,826 -- 1,826 ---------- -------- -------- Total revenue 36,075 49,867 85,942 Expenses Operations 17,194 10,267 27,461 Cash advance loss provision 11,585 27,054 38,639 Administration 2,780 3,852 6,632 Depreciation and amortization 2,072 829 2,901 ---------- -------- -------- Total expenses 33,631 42,002 75,633 ---------- -------- -------- Income from operations $ 2,444 $ 7,865 $ 10,309 ========== ======== ======== As of September 30, 2007: ----------------------------------------- Total assets $122,673 $155,313 $277,986 ========== ======== ======== Goodwill $ 44,618 $ 89,961 $134,579 ========== ======== ======== Total Internet Cash -------- -------- Three Months Ended September 30, 2006: Storefront Lending Advance ----------------------------------------- ---------- -------- -------- Revenue Cash advance fees $ 32,815 $ 3,623 $ 36,438 Check cashing fees, royalties and other 1,887 -- 1,887 ---------- -------- -------- Total revenue 34,702 3,623 38,325 ---------- -------- -------- Expenses Operations 14,193 595 14,788 Cash advance loss provision 10,332 1,237 11,569 Administration 4,928 190 5,118 Depreciation and amortization 1,947 160 2,107 ---------- -------- -------- Total expenses 31,400 2,182 33,582 ---------- -------- -------- Income from operations $ 3,302 $ 1,441 $ 4,743 ========== ======== ======== As of September 30, 2006: ----------------------------------------- Total assets $122,232 $ 52,389 $174,621 ========== ======== ======== Goodwill $ 44,618 $ 11,309 $ 55,927 ========== ======== ======== CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES INCOME FROM OPERATIONS BY OPERATING SEGMENT NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006 (in thousands) Total Internet Cash Nine Months Ended September 30, 2007: Storefront Lending Advance ----------------------------------------- ---------- -------- -------- Revenue Cash advance fees $ 95,240 $134,229 $229,469 Check cashing fees, royalties and other 7,772 5 7,777 ---------- -------- -------- Total revenue 103,012 134,234 237,246 ---------- -------- -------- Expenses Operations 50,539 29,535 80,074 Cash advance loss provision 28,716 78,430 107,146 Administration 7,935 9,391 17,326 Depreciation and amortization 5,924 2,074 7,998 ---------- -------- -------- Total expenses 93,114 119,430 212,544 ---------- -------- -------- Income from operations $ 9,898 $ 14,804 $ 24,702 ========== ======== ======== Total Internet Cash Nine Months Ended September 30, 2006: Storefront Lending Advance ----------------------------------------- ---------- -------- -------- Revenue Cash advance fees $ 87,719 $ 3,623 $ 91,342 Check cashing fees, royalties and other 7,220 -- 7,220 ---------- -------- -------- Total revenue 94,939 3,623 98,562 ---------- -------- -------- Expenses Operations 43,438 595 44,033 Cash advance loss provision 19,960 1,237 21,197 Administration 14,682 190 14,872 Depreciation and amortization 5,813 160 5,973 ---------- -------- -------- Total expenses 83,893 2,182 86,075 ---------- -------- -------- Income from operations $ 11,046 $ 1,441 $ 12,487 ========== ======== ======== CONTACT: Cash America International, Inc. Thomas A. Bessant, Jr., 817-335-1100