Cash America International, Inc. (NYSE: CSH) reported today that it will reorganize its Mexico-based pawn operations to include only full-service pawn locations that offer pawn loans based on the pledge of general merchandise and jewelry collateral, and it will discontinue the operations of approximately 147 of its jewelry-only Mexico-based pawn locations before the end of 2012. Over the last two years the Company has opened 43 full-service pawn locations in Mexico, which the Company intends to continue operating together with a small number of jewelry-only pawn locations that the Company plans to convert into full-service locations over the next six months.
During the six-month period ended June 30, 2012, the Company’s Mexico-based pawn operations reported total revenue of $31.5 million, which represented less than 4% of the Company’s consolidated total revenue of $869.1 million for the same six-month period. However, during the six-month period ended June 30, 2012 the Mexico-based pawn operations reported a loss from operations of $8.3 million, primarily due to unprofitable stores, most of which were jewelry-only pawn locations. Management believes that the elimination of the jewelry-only pawn locations will significantly reduce the loss from operations related to its foreign pawn lending business in 2013 while preserving the opportunity to serve customers in Mexico over the long term with the wider variety of pawn loan options offered by full-service pawn locations.
As a result of the decision to reorganize its Mexico-based pawn operations, the Company expects to incur charges of between $28 and $32 million, which will be recognized primarily in the three months ended September 30, 2012. Following the reorganization, the Company expects to be operating 47 full-service pawn locations in Mexico located primarily in Mexico City and surrounding markets.
About the CompanyAs of June 30, 2012, Cash America International, Inc. operated 1,086 total locations offering specialty financial services to consumers, which included 790 lending locations (including one unconsolidated franchised location) in 23 states in the United States under the names “Cash America Pawn,” “SuperPawn,” “Pawn X-Change,” “Cash America Payday Advance,” and “Cashland,” and 195 pawn lending locations in 21 jurisdictions in central and southern Mexico under the name “Prenda Fácil.” The Company also operated 95 unconsolidated franchised and six Company-owned check cashing centers operating in 16 states in the United States under the name “Mr. Payroll” as of June 30, 2012. Additionally, as of June 30, 2012, the Company offered consumer loans over the Internet to customers in 32 states in the United States at http://www.cashnetusa.com and http://www.netcredit.com, in the United Kingdom at http://www.quickquid.co.uk and http://www.poundstopocket.co.uk, in Australia at http://www.dollarsdirect.com.au, and in Canada at http://www.dollarsdirect.ca. For additional information regarding the Company and the services it provides, visit the Company’s websites located at:
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