Cash America Reports Second Quarter Net Income and Declares Dividend
Cash America Reports Second Quarter Net Income and Declares Dividend
FORT WORTH, Texas--(BUSINESS WIRE)-- Cash America International, Inc. (NYS: CSH) reported today that its net income for the second quarter ended June 30, 2013 was $25,132,000 (81 cents per share), which compares to the second quarter 2012 net income of $29,820,000 (94 cents per share). Earnings per share for the second quarter of 2013 were in line with the Company's pre-announced earnings issued on July 15, 2013. The reduction in earnings for the second quarter of 2013, when compared to the second quarter of 2012, is primarily attributable to a decline in gross profit on disposition proceeds primarily associated with the commercial sales of refined gold in the Company's Domestic Retail Services Segment. The second quarter earnings fell short of the Company's published earnings guidance primarily due to reduced customer demand for the loan products provided through the Company's Domestic Retail Services Segment, higher expenses for health insurance and personnel costs and additional interest expense associated with the $300 million senior note offering which closed in early May.
Total revenue for the second quarter ended June 30, 2013 was $411.0 million compared to $411.6 million in the second quarter of 2012. Net revenue, which is total revenue less cost of merchandise sold and loan loss provision expense, was up 5% to $244.8 million for the three-month period ended June 30, 2013 compared to the prior year primarily due to growth in the Company's E-Commerce Segment. The E-Commerce Segment posted higher total revenue levels and lower loan losses as a percentage of revenue leading to a 22% increase in net revenue, which reached $106.0 million for the second quarter ended June 30, 2013 compared to $86.6 million in the same quarter in 2012. The E-Commerce Segment generated income from operations of $36.4 million in the second quarter of 2013, representing an increase of 21% compared to the same period in 2012.
Commenting on the results of the quarter, Daniel R. Feehan, President and Chief Executive Officer of Cash America said, "The overall financial results for the second quarter reflect the trends that we have experienced over the past four quarters. Our Domestic Retail Services Segment has faced an industry-wide challenge of adjusting to the rapidly changing environment for the commercial sales of scrap gold and to historically tepid loan demand. At the same time, our E-Commerce Segment remains a bright spot for our enterprise with ongoing growth in its revenue and earnings associated with its diversification of loan products in both the U.S. and international markets. We expect the trends reflected in our second quarter results will continue through the balance of 2013."
For the first six months of fiscal year 2013, total revenue increased 1% to $879.1 million compared to $869.1 million for the same period in 2012 and net revenue for the same comparison period was up 5% reaching $516.7 million in 2013 versus $490.4 million in 2012. The Company posted net income of $69,058,000 ($2.23 per share) for the first six months of fiscal year 2013 compared to $71,287,000 ($2.24 per share) for the same period in 2012.
Cash America will host a conference call to discuss the second quarter results on Thursday, July 25, at 7:00 AM CDT. A live webcast of the call will be available on the Investor Relations section of the Company's corporate website (http://www.cashamerica.com). To listen to the live call, please go to the website at least fifteen minutes early to register, download, and install any necessary audio software. A replay will be available on the Company's website following the call.
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 at the close of business on August 21, 2013 to shareholders of record on August 7, 2013.
Outlook for the Third Quarter of 2013 and Related Fiscal Year
Management believes that the opportunities for growth in revenue and earnings will be largely associated with the customer demand for the credit products provided by the Company, which take the form of pawn loans and consumer loans and the disposition of unredeemed collateral by way of consumer spending on retail sales and the commercial sale of refined gold and diamonds. Other elements that could affect the growth in revenue include the regulatory governance of consumer loan products, the continued development and growth of new lending products offered by the Company's E-Commerce Segment, the development and growth of the Company's Mexico-based pawn operations, and the prevailing market price of gold. As the Company enters the third quarter of 2013, management anticipates that demand for the Company's consumer loan products in its Retail Services Segment will continue on a moderate pace similar to the pace we experienced in the second quarter of 2013, which will be partially offset by growth in the E-Commerce Segment. Demand for the Company's pawn lending products continued to prove challenging in the second quarter and management expects future growth in its pawn lending business, but is reserved about expectations for the remainder of 2013.
Based on its views and on the preceding factors, management expects the third quarter 2013 net income per share to be between 75 cents and 85 cents per share compared to 37 cents per share in the third quarter of 2012, which included unusual items mostly related to the Company's reorganization of its Mexico based pawn operations in 2012 that reduced net income and earnings per share by $20.4 million and 65 cents per share, respectively. Based on the Company's results through the first half of 2013, which produced earnings per share of $2.23, and the factors noted above for the remainder of 2013, management expects its fiscal year 2013 earnings per share to be in a range of between $4.15 and $4.35 per share, compared to $3.42 per share in fiscal 2012, which included $25.4 million (81 cents per share) related to the Mexico reorganization, $8.4 million (27 cents per share) related to the Ohio refund expense, and $2.5 million (7 cents per share) related to expenses associated with the July 2012 withdrawal of the Enova International, Inc. proposed initial public offering.
About the Company
As of June 30, 2013, Cash America International, Inc. operated 964 total locations offering specialty financial services to consumers, which included the following:
- 827 lending locations in 22 states in the United States primarily under the names "Cash America Pawn," "SuperPawn," "Cash America Payday Advance," and "Cashland;"
- 47 pawn lending locations in central and southern Mexico under the name "Cash America casa de empeño;" and
- 90 check cashing centers (all of which are unconsolidated franchised check cashing centers) operating in 14 states in the United States under the name "Mr. Payroll."
Additionally, as of June 30, 2013, 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:
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This release contains forward-looking statements about the business, financial condition, operations and prospects of 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: the effect of or changes in domestic and foreign pawn, consumer credit, tax and other laws and governmental rules and regulations applicable to the Company's business or changes in the interpretation or enforcement thereof; the anticipated regulation of providers of consumer financial products and services by the Consumer Financial Protection Bureau; public perception of the Company's business, including its consumer loan business and its business practices; the deterioration of the political, regulatory or economic environment in foreign countries where the Company operates or in the future may operate; fluctuations, including a sustained decrease, in the price of gold or deterioration in economic conditions; the effect of any current or future litigation proceedings or any judicial decisions or rule-making that affect the Company, its products or its arbitration agreements; the actions of third parties who provide, acquire or offer products and services to, from or for the Company; changes in demand for the Company's services, the Company's ability to attract and retain qualified executive officers; a prolonged interruption in the Company's operations of its facilities, systems and business functions, including its information technology and other business systems; the ability of the Company to open new locations in accordance with its plans or to successfully integrate newly acquired businesses into the Company's operations; changes in competition; interest rate and foreign currency exchange rate fluctuations; changes in the capital markets; changes in the Company's ability to satisfy its debt obligations or to refinance existing debt obligations or obtain new capital to finance growth; security breaches, cyber attacks or fraudulent activity; compliance with laws and regulations applicable to international operations; the implementation of new, or changes in the interpretation of existing, accounting principles or financial reporting requirements; acts of God, war or terrorism, pandemics and other events; the effect of any of such changes on the Company's business or the markets in which it operates; and other risks and uncertainties 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," "should," "could," "would," "plans," "expects," "anticipates," "may," "forecasts," "projects" and similar expressions and variations 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|
|(dollars in thousands, except per share data)|
|Three Months Ended||Six Months Ended|
|June 30,||June 30,|
|Income from Operations||$||49,248||$||54,231||$||126,834||$||126,239|
|Income before income taxes||40,390||47,283||110,106||112,114|
|Net (income) loss attributable to the noncontrolling interest||(312||)||600||(308||)||1,544|
|Net Income Attributable to Cash America International, Inc.||$||25,132||$||29,820||$||69,058||$||71,287|
|Earnings per share:|
|Net Income attributable to Cash America International, Inc.
|Weighted average common shares outstanding:|
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
|(dollars in thousands, except per share data)|
|June 30,||December 31,|
|Cash and cash equivalents||$||131,905||$||68,939||$||63,134|
|Consumer loans, net||287,127||226,364||289,418|
|Merchandise held for disposition, net||155,112||144,814||167,409|
|Pawn loan fees and service charges receivable||45,566||44,606||48,991|
|Income taxes receivable||25,495||-||-|
|Prepaid expenses and other assets||30,985||34,578||35,605|
|Deferred tax assets||43,628||37,846||48,992|
|Total current assets||949,392||790,056||898,189|
|Property and equipment, net||250,842||255,685||261,771|
|Intangible assets, net||34,067||32,819||36,473|
|Liabilities and Equity|
|Accounts payable and accrued expenses||$||123,037||$||93,569||$||126,664|
|Income taxes currently payable||-||2,135||5,922|
|Current portion of long-term debt||22,606||35,939||43,617|
|Total current liabilities||158,605||143,180||187,623|
|Deferred tax liabilities||103,759||93,930||101,711|
|Noncurrent income tax payable||36,834||2,449||2,703|
|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
|Additional paid-in capital||156,349||166,135||157,613|
|Accumulated other comprehensive (loss) income||(362||)||(3,988||)||3,128|
Treasury shares, at cost (2,107,082 shares, 929,223 shares and 1,351,712 shares as of June 30, 2013 and 2012, and as of December 31, 2012, respectively)
|Total Cash America International, Inc. shareholders' equity||1,016,089||975,602||991,895|