Advance America, Cash Advance Centers, Inc. Q1 2010 Earnings Call Transcript

Advance America, Cash Advance Centers, Inc. Q1 2010 Earnings Call Transcript
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Advance America, Cash Advance Centers, Inc. (AEA)

Q1 2010 Earnings Call Transcript

April 29, 2010 8:00 am ET

Executives

Jamie Fulmer – Director, IR

Ken Compton – President and CEO

Patrick O'Shaughnessy – EVP and CFO

Analysts

David Burtzlaff – Stephens

John Hecht – JMP Securities

Rick Shane – Jefferies

Isabel Sterk – CK Cooper

Ed Atorino [ph] – Chalkville [ph]

Presentation

Operator

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Good day, everyone and welcome to the Advance America, Cash Advance Centers first quarter earnings results conference call. As a reminder, this call is being recorded. At this time for opening remarks and introductions, I'd like to turn the call over to Jamie Fulmer. Please go ahead, sir.

Jamie Fulmer

Good morning. I'd like to remind you that during this call, our comments will include certain forward-looking statements. All comments on this call, other than those relating to our historical information or our current conditions will be forward-looking statements.

For example, any statements regarding our future expenditures and financial performance, our plans for product expansion, our business strategy, our expected developments in the cash advance services industry will be forward-looking statements. In this regard, please keep in mind that our actual future results could differ materially from our expectations as of today and are subject to risks, uncertainties and other factors, many of which may are not within our control or may not be predicted.

For more detailed discussion of some of these factors, please refer to the Risk Factor section of our Annual Report on Form 10K for the year-ended December 31, 2009, a copy of which is available from the SEC upon request from us or by going to our website at www.advanceamerica.net.

Now, I'd like to turn the call over to our Chief Executive Officer, Ken Compton.

Ken Compton

Good morning and welcome to our first quarter earnings call. Also joining me today are, is our company’s Chief Financial Officer, Patrick O'Shaughnessy. Yesterday, the company reported the results of the quarter-ended March 31, 2010. As I said in yesterday’s release, we are able to maintain a solid performance throughout the quarter.

On the whole, we are experiencing growth and markets across the country, which we believe is evidenced by our model works and there is continued strong demand for the service we offer amid a change in landscape of available credit. In fact, if you remove the states affected by law and regulatory changes, same center growth rates were the best we have seen in some time.

I’d like to update you on few developments since our last call. Yesterday, our Board of Directors approved Advance America’s 22nd consecutive dividend as a public company. This dividend of six in a quarter of cents per share is payable on June 4, 2010 to stockholders of record as of May 25, 2010. At March 31 of 2010, we have returned approximately $375.7 million in cash to our stockholders since we became a public company to the payment of our quarterly dividends together with our stock repurchase program. This amount reflects our Boards consistent track record or returning value to our shareholders.

Concerning the 2010 legislative season, we remain extremely active in monitoring and evaluating regulatory initiatives in all the states and Washington D.C. for their various pieces of legislation under consideration that could possibly impact our future performance. Of course, more – much of the recent attention has been centered on the proposal to create a consumer financial protection agency or bureau, which may significantly impact the way millions of consumers access credit.

It is important to point out that this new financial regulation reform is not specific to pay any lending, but involves a series of reform that will broadly affect financial services. A concern of many companies across a wide array of industries is that the consumer protection is devised by this new federal agency may restrict availability of all forms of credit while raising cost.

Consumers would surely suffer paying more for financial products and many of the MRE feeling squeezed after the economic development in the United States during the last 18 months. I met a highly charged public debate on financial services reform and consumer protections.

We want to make one point very clear. Advance America strongly believes that a competitive and regulated financial environment is the best – is in the best interest of consumers. So far the debate on financial reform has failed to adequately disclose two important facts, Advance America and responsible lenders like us are already highly regulated at the state and federal level and provide critical access to credit in a tight market. Our company has long placed a premium on many of the elements at law makers are seeking to ensure through the creation of a consumer protection agency specifically simplicity, transparency and full disclosure of loan terms and conditions.

Our customers tell us that they chose our service because it’s cost competitive, but also because it’s highly regulated and transparent. They trust our service because it does not involve hidden fees or compensated [ph] terms and they know it can be the least expense of our option particularly compared to the cost of our overdraft protection, bounce checks, and late bill payments.

Customers also tell us that they are extremely satisfied with our products and services evidenced by the low number of compliance received by State Agencies regarding our company. In fact, last year out of a 100 – out of $11.5 million transactions, there were less than 100 customer compliance with State Agencies. We operate in 32 States that improve regulations on our industry instituting measures that compliment existing federal laws.

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