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Cash America Announces Fourth Quarter And Fiscal Year-End Earnings And Declares Dividend

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
HIGHLIGHTS OF CONSOLIDATED RESULTS OF OPERATIONS
(dollars in thousands, except per share data)
(Unaudited)
  Three Months Ended   Year Ended
December 31, December 31,
2012   2011 2012   2011
Consolidated Operations:
Total revenue $ 491,604 $ 473,957 $ 1,800,430 $ 1,583,064
Net revenue 267,088 248,329 1,005,957 909,759
Total expenses     217,600     180,204     790,042     665,417
 
Income from Operations $ 49,488 $ 68,125 $ 215,915 $ 244,342
 
Income before income taxes     41,160     60,688     186,320     217,526
 
Net Income   $ 23,991   $ 37,605   $ 101,664   $ 135,166
 
Net loss attributable to the noncontrolling interest   $ 489   $ 222   $ 5,806   $ 797
 
Net Income Attributable to Cash America International, Inc.   $ 24,480   $ 37,827   $ 107,470   $ 135,963
 
Earnings per share:
Net Income attributable to Cash America International, Inc.

common shareholders:
Basic $ 0.84 $ 1.28 $ 3.64 $ 4.59
Diluted $ 0.79 $ 1.18 $ 3.42 $ 4.25
 
Weighted average common shares outstanding:  
Basic 29,262 29,528 29,514 29,602
Diluted 30,884 32,059 31,452 31,991

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share data)
(Unaudited)
 
December 31,
  2012   2011
 
Assets
Current assets:
Cash and cash equivalents $ 63,134 $ 62,542
Pawn loans 244,640 253,519
Consumer loans, net 289,418 222,778
Merchandise held for disposition, net 167,409 161,884
Pawn loan fees and service charges receivable 48,991 48,003
Prepaid expenses and other assets 35,605 31,301
Deferred tax assets   48,992     35,065
Total current assets 898,189 815,092
Property and equipment, net 261,771 246,429
Goodwill 608,216 562,721
Intangible assets, net 36,473 34,771
Other assets   13,609     15,236
Total assets $ 1,818,258   $ 1,674,249
 
Liabilities and Equity
Current liabilities:
Accounts payable and accrued expenses $ 126,664 $ 113,113
Customer deposits 11,420 9,935
Income taxes currently payable 5,922 12,880
Current portion of long-term debt   43,617     34,273
Total current liabilities 187,623 170,201
Deferred tax liabilities 101,711 89,712
Noncurrent income tax payable 2,703 2,315
Other liabilities 888 1,413
Long-term debt   534,713     503,018
Total liabilities $ 827,638   $ 766,659
 
Equity:
Cash America International, Inc. equity:
Common stock, $0.10 par value per share, 80,000,000 shares
authorized, 30,235,164 shares issued and outstanding 3,024 3,024
Additional paid-in capital 157,613 167,683
Retained earnings 879,434 776,060
Accumulated other comprehensive income (loss) 3,128 (6,896)
Treasury shares, at cost (1,351,712 shares and 1,011,356 shares
at December 31, 2012 and 2011, respectively)   (51,304)     (37,419)
Total Cash America International, Inc. shareholders' equity 991,895 902,452
Noncontrolling interest   (1,275)     5,138
Total equity   990,620     907,590
Total liabilities and equity $ 1,818,258   $ 1,674,249

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per share data)

(Unaudited)
 
Three Months Ended Year Ended
December 31, December 31,
2012   2011 2012   2011
(Unaudited)
 
Revenue
Pawn loan fees and service charges $ 79,479 $ 76,063 $ 300,929 $ 282,197
Proceeds from disposition of merchandise 185,935 215,196 703,767 688,884
Consumer loan fees 222,864 180,124 781,520 598,646
Other   3,326     2,574     14,214     13,337
Total Revenue   491,604     473,957     1,800,430     1,583,064
Cost of Revenue
Disposed merchandise 127,301 145,145 478,179 447,617
Consumer loan loss provision   97,215     80,483     316,294     225,688
Total Cost of Revenue   224,516     225,628     794,473     673,305
 
Net Revenue   267,088     248,329     1,005,957     909,759
Expenses
Operations and administration 199,054 165,655 714,614 611,268
Depreciation and amortization   18,546     14,549     75,428     54,149
Total Expenses   217,600     180,204     790,042     665,417
Income from Operations 49,488 68,125 215,915 244,342
Interest expense (8,066) (7,221) (29,131) (25,528)
Interest income 65 25 144 81
Foreign currency transaction gain (loss) (241) (207) (313) (1,265)
Equity in loss of unconsolidated subsidiary   (86)     (34)     (295)     (104)
Income before Income Taxes 41,160 60,688 186,320 217,526
Provision for income taxes   17,169     23,083     84,656     82,360
Net Income 23,991 37,605 101,664 135,166
Net loss attributable to the noncontrolling interest   489     222     5,806     797
Net Income Attributable to Cash America International, Inc. $ 24,480   $ 37,827   $ 107,470   $ 135,963
Earnings Per Share:
Net Income attributable to Cash America International, Inc. common shareholders:
Basic $ 0.84 $ 1.28 $ 3.64 $ 4.59
Diluted $ 0.79 $ 1.18 $ 3.42 $ 4.25
Weighted average common shares outstanding:
Basic 29,262 29,528 29,514 29,602
Diluted 30,884 32,059 31,452 31,991
Dividends declared per common share $ 0.035 $ 0.035 $ 0.140 $ 0.140

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

PAWN LENDING ACTIVITIES – FINANCIAL AND OPERATING DATA

(dollars in thousands, except where otherwise noted)

 
 

The following tables outline certain data related to pawn loan activities of Cash America International, Inc. (the “Company”) as of and for the three months and years ended December 31, 2012 and 2011 (dollars in thousands).
   
2012 2011
Domestic   Foreign   Total Domestic   Foreign   Total
As of December 31,
Ending pawn loan balances $ 240,573 $ 4,067 $ 244,640 $ 238,399 $ 15,120 $ 253,519
Ending merchandise balance, net $ 161,655 $ 5,754 $ 167,409 $ 151,274 $ 10,610 $ 161,884
 
Three Months Ended December 31,
 
Pawn loan fees and service charges $ 77,354 $ 2,125 $ 79,479 $ 71,420 $ 4,643 $ 76,063
Average pawn loan balance outstanding $ 240,545 $ 7,775 $ 248,320 $ 231,424 $ 17,561 $ 248,985
Amount of pawn loans written and renewed $ 241,215 $ 8,998 $ 250,213 $ 227,944 $ 37,266 $ 265,210
Annualized yield on pawn loans 127.9% 108.7% 127.3% 122.4% 104.9% 121.2%
Average amount per pawn loan (in ones) $ 133 $ 84 $ 127 $ 134 $ 99 $ 128
Gross profit margin on disposition of merchandise 32.6% 13.5% 31.5% 33.1% 24.8% 32.6%
Merchandise turnover 2.8 4.3 2.9 3.3 4.1 3.4
 
2012 2011
Year Ended December 31, Domestic Foreign Total Domestic Foreign Total
Pawn loan fees and service charges $ 288,161 $ 12,768 $ 300,929 $ 261,829 $ 20,368 $ 282,197
Average pawn loan balance outstanding $ 225,066 $ 12,055 $ 237,121 $ 205,610 $ 20,037 $ 225,647
Amount of pawn loans written and renewed $ 916,215 $ 60,476 $ 976,691 $ 869,203 $ 118,126 $ 987,329
Annualized yield on pawn loans 128.0% 105.9% 126.9% 127.3% 101.7% 125.1%
Average amount per pawn loan (in ones) $ 131 $ 88 $ 124 $ 127 $ 103 $ 124
Gross profit margin on disposition of merchandise 33.5% 12.0% 32.1% 36.4% 18.6% 35.0%
Merchandise turnover 2.9 3.9 3.0 3.0 5.0 3.1

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

MERCHANDISE DISPOSITION, GROSS PROFIT AND INVENTORY OPERATING DATA

(dollars in thousands)

Profit from the disposition of merchandise represents the proceeds received from the disposition of merchandise in excess of the cost of disposed merchandise, which is the Company's cost basis in the loan or the amount paid for purchased merchandise. The following tables summarize the proceeds from the disposition of merchandise and the related profit for the three months and years ended December 31, 2012 and 2011 (dollars in thousands).
  Three Months Ended December 31,
2012   2011
Retail   Commercial   Total Retail   Commercial   Total
Proceeds from disposition $ 113,964 $ 71,971 $ 185,935 $ 105,423 $ 109,773 $ 215,196
Gross profit on disposition $ 40,625 $ 18,009 $ 58,634 $ 37,712 $ 32,339 $ 70,051
Gross profit margin 35.6 % 25.0 % 31.5 % 35.8 % 29.5 % 32.6 %
Percentage of total gross profit 69.3 % 30.7 % 100.0 % 53.8 % 46.2 % 100.0 %
Year Ended December 31,
2012   2011
Retail   Commercial   Total Retail   Commercial   Total
Proceeds from disposition $ 391,566 $ 312,201 $ 703,767 $ 358,695 $ 330,189 $ 688,884
Gross profit on disposition $ 144,095 $ 81,493 $ 225,588 $ 137,620 $ 103,647 $ 241,267
Gross profit margin 36.8 % 26.1 % 32.1 % 38.4 % 31.4 % 35.0 %
Percentage of total gross profit 63.9 % 36.1 % 100.0 % 57.0 % 43.0 % 100.0 %

The table below summarizes the age of merchandise held for disposition before valuation allowance of $0.8 million and $0.7 million as of December 31, 2012 and 2011 (dollars in thousands).
  As of December 31,
2012     2011
Amount   % Amount   %
Jewelry – held for one year or less $ 99,489 59.0 $ 99,683 61.3
Other merchandise – held for one year or less   60,344   35.8       56,483   34.8
Total merchandise held for one year or less   159,833   94.8       156,166   96.1
Jewelry – held for more than one year 3,283 1.9 2,626 1.6
Other merchandise – held for more than one year   5,597   3.3       3,792   2.3
Total merchandise held for more than one year   8,880   5.2       6,418   3.9
Total merchandise held for disposition $ 168,713   100.0     $ 162,584   100.0

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSUMER LOAN FINANCIAL AND OPERATING DATA

(dollars in thousands, except where otherwise noted)

 
 

The following tables set forth consumer loan fees by segment, adjusted for the deduction of the loan loss provision for the three months and years ended December 31, 2012 and 2011 (dollars in thousands).
 
Three Months Ended December 31,
2012   2011
Retail Services   E-Commerce   Total Retail Services   E-Commerce   Total
Interest and fees on short-term loans $ 28,803 $ 120,539 $ 149,342 $ 30,570 $ 117,449 $ 148,019
Interest and fees on line of credit - 27,558 27,558 - 9,797 9,797
Interest and fees on installment loans   3,693       42,271       45,964       2,790       19,518       22,308  
Consumer loan fees $ 32,496 $ 190,368 $ 222,864 $ 33,360 $ 146,764 $ 180,124
Consumer loan loss provision   10,095       87,120       97,215       8,549       71,934       80,483  
Consumer loan fees, net of loss provision $ 22,401     $ 103,248     $ 125,649     $ 24,811     $ 74,830     $ 99,641  
 
Year-over-year change - $ $ (2,410) $ 28,418 $ 26,008 $ (1,120) $ 21,419 $ 20,299
Year-over-year change - % (9.7) % 38.0 % 26.1 % (4.3) % 40.1 % 25.6 %
Consumer loan loss provision as a % of

consumer loan fees
  31.1 %     45.8 %     43.6 %     25.6 %     49.0 %     44.7 %
 
Year Ended December 31,
2012 2011
Retail Services E-Commerce Total Retail Services E-Commerce Total
Interest and fees on short-term loans $ 109,972 $ 459,793 $ 569,765 $ 110,071 $ 400,810 $ 510,881
Interest and fees on line of credit - 73,572 73,572 - 30,590 30,590
Interest and fees on installment loans   11,920       126,263       138,183       9,121       48,054       57,175  
Consumer loan fees $ 121,892 $ 659,628 $ 781,520 $ 119,192 $ 479,454 $ 598,646
Consumer loan loss provision   29,225       287,069       316,294       24,001       201,687       225,688  
Consumer loan fees, net of loss provision $ 92,667     $ 372,559     $ 465,226     $ 95,191     $ 277,767     $ 372,958  
 
Year-over-year change - $ $ (2,524) $ 94,792 $ 92,268 $ (1,345) $ 65,745 $ 64,400
Year-over-year change - % (2.7) % 34.1 % 24.7 % (1.4) % 31.0 % 20.9 %

Consumer loan loss provision as a % of consumer loan fees

 
  24.0 %     43.5 %     40.5 %     20.1 %     42.1 %     37.7 %

In addition to reporting consumer loans owned by the Company and consumer loans guaranteed by the Company, which are either generally accepted accounting principles (“GAAP”) items or disclosures required by GAAP, the Company has provided combined consumer loans, which is a non-GAAP measure. In addition, the Company has reported consumer loans written and renewed, which is statistical data that is not included in the Company’s financial statements. The Company also reports allowances and liabilities for estimated losses on consumer loans and on a combined basis, which are GAAP measures that are included in the Company’s financial statements.

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