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Advance America, Cash Advance Centers' CEO Discusses Q3 2011 Results - Earnings Call Transcript

While still early in the transition, we’ve seen most of the centers and met the employees and believe that we share a common commitment to providing the highest level of customer service possible.

We believe that this acquisition will return value to our shareholders quickly and expect they will be accretive during 2012. It will also likely cause higher operating costs during the fourth quarter due to costs associated with the completion of the acquisition and the addition of 300 new centers.

As we previously disclosed, highlights of the acquired businesses, unaudited financial results for the trailing 12 months ended June 30, 2011 included total revenues of $72.1 million, center gross profit of $20.3 million and SG&A expense of $8.8 million. Included in this cost is depreciation of expense of $900,000.

We will continue to evaluate future opportunities that will supplement our existing footprint, allow for market expansion and provide access to new product platforms. As evidenced by our financial results for the quarter and nine months, market demand for short-term credit continues to be strong.

Historically, consumers can satisfy their demand for short-term credit through several different options, including late payments to vendors, overdraft protection NSF, debit advance and courtesy pay offered by banks and credit unions. Unsecured cash advances from retail vendors like Advance America, as well check cashiers and online lenders or short-term secured loans like those offered by car title and pawn makers.

As I have shared with you on numerous occasions, we have always welcomed the healthy competition in the short-term credit market whether it’s from banks or non-bank providers. I believe consumers benefit from having multiple options.

We’ve recently seen activity from both depository and alternative financial service providers as they focus on developing strategies to better serve their customer short-term credit needs.

Short-term credit services offered by banks, credit unions and new startups are receiving increased attention. Banks can offer depositors advance loans since well before Advance America was founded in 1997. The more of these institutions and others are beginning to offer this as a service to their customers.

While these products have gained some media attention lately, most banks and credit unions continue to provide overdraft services and courtesy pay as their primary source of short-term credit to their customers.

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