Cash America International, Inc. (NYSE:CSH), a leading provider
of pawn lending and related services in the United States,
announced today that net income and net income per share for the
first quarter of 2016 increased 36% and 56%, respectively, to
$10,633,000 (42 cents per share) compared to net income of
$7,845,000 (27 cents per share) for the first quarter of 2015. The
prior year first quarter included reorganization expenses and a
gain on disposition of equity securities, which in aggregate would
increase prior year earnings when added back, to create adjusted
net income, a non-GAAP measure, of $8.3 million (29 cents per
share) for the first quarter of 2015. Cash America's earnings per
share for the first quarter of 2016 of 42 cents was an increase of
45%, compared to adjusted net income per share of 29 cents for the
first quarter of 2015 and exceeded Cash America’s published
guidance range of between $0.35 and $0.41 from its press release
dated January 28, 2016.
Commenting on the first quarter results, T. Brent Stuart,
President and Chief Executive Officer of Cash America, said, “We
are very pleased with our success in the first quarter, and we are
also very excited about the important announcement made this
morning regarding Cash America’s proposed merger with First Cash
Financial Services. We believe that the merger of equals will
provide great benefit to our shareholders by combining two leaders
in the pawn industry. We look forward to providing additional
details about the merger as it progresses.”
Consolidated total revenue increased 2% to $277.2 million for
the three-month period ended March 31, 2016, compared to $271.8
million in the same period in 2015. Consolidated net revenue was
$144.0 million for the first quarter of 2016 compared to $147.1
million for the first quarter of 2015. While net revenue for the
first quarter of 2016 was slightly below the prior year's first
quarter results, management’s emphasis on improvement in marginal
profitability produced a 22% increase in income from operations,
which was $19.7 million for the first quarter of 2016, compared to
$16.2 million for the first quarter of 2015.
Mr. Stuart further commented on the first quarter results and
said, “Our operations team placed significant emphasis on improving
our operating margin and executing a strategy of in store retail
sales activities. I am pleased to report that we were able to
successfully achieve both objectives in the first quarter of 2016.
Our in store retail sales activities posted a year-over-year
increase of 1.7% with a higher retail gross profit margin of 32.9%
compared to 31.7% last year, which generated an increase in retail
gross profit dollars of 5.6%. We were also very excited to see that
same store pawn loan balances turned the corner and finished the
first quarter up 1.2% above the prior year.”
Additionally, Cash America International, Inc. (the “Company” or
“Cash America”) announced that its Board of Directors, at a
regularly scheduled quarterly meeting, declared a $0.08 (8 cents)
per share cash dividend on common shares outstanding. The dividend
will be paid at the close of business on May 25, 2016, to
shareholders of record on May 11, 2016.
The Company will host a conference call to discuss the first
quarter results as well as the proposed merger of equals with First
Cash Financial Services, Inc. (“First Cash”) on Thursday,
April 28, 2016, at 7:00 AM CDT (8:00 AM EDT). A live webcast
of the call will be available on the Investor Relations section of
the Company’s corporate website http://www.cashamerica.com. The dial-in number is
(212) 231-2930. Participants should dial in 10 minutes prior to the
scheduled start time.
A link to the live webcast of the conference call will be
available on the Investor Relations section of the Company’s
website at www.cashamerica.com.
A webcast replay will be available shortly after the call
concludes and will be available on the Company’s website. A replay
may also be accessed by dialing toll-free: (800) 633-8284. The
replay confirmation code is 21776991.
An additional audio commentary on the financial results for the
quarter will also be available on the Investor Relations section of
the Company’s corporate website at www.cashamerica.com and a
transcript for the audio commentary has been filed with the
Securities and Exchange Commission (the “SEC”).
First Quarter of 2016
Results
The Company’s financial results for the three months ended March
31, 2016 (the “current quarter”), compared to the three months
ended March 31, 2015 (the “prior year quarter”), are summarized
below.
Highlights
- Total revenue was $277.2 million
for the current quarter, representing an increase of
$5.4 million, or 2.0%, compared to the prior year quarter. Net
revenue decreased $3.0 million, or 2.1%, to
$144.0 million for the current quarter compared to the prior
year quarter.
- Same-store net revenue decreased 1.8%
for the current quarter compared to the prior year quarter.
Same-store net revenue, excluding net revenue from commercial
disposition activities and net revenue from consumer loans,
increased 3.9% for the current quarter compared to the prior year
quarter. In comparison to pawn lending and the retail disposition
of merchandise, commercial disposition activities and consumer
lending activities represent sources of net revenue that are much
less central to the Company’s core operations and strategy.
- Income from operations was
$19.7 million for the current quarter, representing an
increase of $3.5 million, or 21.6%, compared to the prior year
quarter, primarily due to a $5.5 million decrease in
operations and administration expenses.
- Net income was $10.6 million for the
current quarter, representing an increase of $2.8 million, or
35.5%, compared to the prior year quarter. Diluted net income per
share was $0.42 for the current quarter compared to $0.27 for the
prior year quarter. Net income and net income per share were
affected by certain income and expense items in the current quarter
and prior year quarter. See the Non-GAAP Disclosure section for
Adjusted Earnings and Adjusted Earnings Per Share included in the
attachments to this press release for additional information
regarding these items.
Pawn Lending Activities
- Average pawn loan balances outstanding
increased $2.1 million, or 0.9%, in the current quarter compared to
the prior year quarter, primarily due to higher average pawn loan
balances in same-store pawn locations. Partially offsetting this
increase, average pawn loan balances outstanding decreased due to a
decrease in the number of stores offering pawn loans following the
closure or sale of certain less profitable store locations.
Same-store pawn loan balances were 1.2% higher at March 31,
2016, compared to March 31, 2015.
- Pawn loan fees and service charges
increased by $2.4 million, or 3.1%, in the current quarter
compared to the prior year quarter. This increase was primarily
driven by higher average pawn loan balances in the current quarter
compared to the prior year quarter, as well as a higher pawn loan
yield of 138.1% in the current quarter compared to 136.4% in the
prior year quarter, primarily due to a shift in the geographic
concentrations of pawn loans into states with higher statutory pawn
loan yields and, to a lesser extent, an increase in the permitted
statutory loan fees in some markets.
Merchandise Disposition Activities
- Proceeds from disposition for pawn
operations increased $6.1 million, or 3.5%, from the prior year
quarter to the current quarter. Retail proceeds from disposition
comprised $2.6 million of the total increase, primarily due to an
increase in jewelry sales in the Company’s storefront locations.
The Company’s merchandise turnover ratio remained relatively stable
at 2.2 times in the current quarter compared to 2.3 times in the
prior year quarter.
- Total gross profit on disposition for
pawn operations decreased $3.3 million, or 6.2%, from the
prior year quarter to the current quarter, due to a
$5.9 million decrease in gross profit on commercial
dispositions mainly as a result of lower gold and diamond yields,
which produced a negative gross profit margin on commercial
dispositions in the current quarter. Partially offsetting the loss
on commercial dispositions was a $2.6 million, or 5.6%,
increase in gross profit on retail dispositions, primarily due to
the Company’s emphasis on retail jewelry sales in storefront
locations. The gross profit margin on retail dispositions increased
to 32.9% in the current quarter, compared to 31.7% in the prior
year quarter.
- Merchandise held for disposition, net
of allowance, increased $27.6 million, or 14.1%, from
March 31, 2015, to March 31, 2016. The increase was
primarily due to an increase in jewelry inventory as a result of
the Company’s continued emphasis on retail disposition of jewelry
in stores and efforts to place less reliance on the commercial
disposition of jewelry. Inventory held for over one year decreased
to 4.9% of total merchandise compared to 5.3% in the prior year
quarter, and included a greater mix of jewelry inventory to general
merchandise inventory in the current quarter compared to the prior
year quarter.
Consumer Loan Activities
- Consumer loan fees represented only 7%
of consolidated total revenue for the current quarter, compared to
8% of consolidated total revenue for the prior year quarter, due to
the continuation of the Company’s strategy to eliminate consumer
lending activities in many of its locations. Consumer loan fees,
net of the loss provision, decreased $1.4 million, or 8.8%, in the
current quarter compared to the prior year quarter, primarily due
to a $2.2 million, or 10.9%, decrease in consumer loan fees. The
decrease in consumer loan fees was primarily due to a decrease in
short-term consumer loan fees of $5.4 million, or 31.8%, as a
result of the closure and sale of certain store locations and the
Company’s strategic decision to deemphasize and eliminate
short-term consumer lending activities in many of its
locations.
- The consumer loan loss provision as a
percentage of consumer loan fees decreased to 21.8% in the current
quarter compared to 23.6% in the prior year quarter.
Expenses
- Consolidated operations and
administration expenses decreased $5.5 million, or 4.8%, in
the current quarter compared to the prior year quarter. This
overall decline in expenses is consistent with management’s
strategy and related initiatives to improve marginal profitability
by optimizing the Company’s overall cost structure.
- Depreciation and amortization expenses
decreased $1.0 million for the current quarter compared to the
prior year quarter, primarily due to a reduced number of pawn and
consumer lending locations as a result of store closures and sales
and a reduced level of capital investment related to the remodeling
of stores.
- Interest expense, net of interest
income, increased $0.3 million, or 7.1%, in the current quarter
compared to the prior year quarter, primarily due to interest
expense accrued as part of a settlement of an income tax matter
related to the 2011 and 2012 tax years.
- The Company’s effective tax rate was
33.4% in the current quarter as compared to the effective tax rate
of 38.5% in the prior year quarter. The effective tax rate in
the current quarter was lower due to lower state income taxes and a
$0.6 million excess income tax benefit from stock compensation that
reduced the income tax provision as a result of the prospective
adoption of Accounting Standards Update 2016-09.
Liquidity
- During the first quarter of 2016, the
Company repurchased 844,000 shares under its 3.0 million share
repurchase authorization announced on October 29, 2015. These
repurchased shares represented approximately 3.3% of the fully
diluted shares as of the end of December 31, 2015.
- Net cash provided by operating
activities was $45.4 million for the current quarter, which
represented an increase of $5.6 million, or 14.0%, from $39.8
million in the prior year quarter.
- The Company finished the quarter with
$48.3 million in cash and had no borrowings under its $280 million
line of credit.
- The net debt balance, defined as total
debt less cash, as of March 31, 2016, was $131 million resulting in
a net debt to capital ratio of 11% and a net debt to Adjusted
EBITDA ratio for the trailing 12 months ended March 31, 2016, of
1.1 times.
- With respect to the Enova shares
retained by the Company in connection with the spin-off of Enova
International, Inc. (“Enova”) that occurred in November 2014, the
Company has agreed, pursuant to a private letter ruling and a
supplemental request, which was approved by the Internal Revenue
Service during the quarter and extended the date for the required
sale of Enova shares, to dispose of its Enova shares (other than
shares retained for delivery under the Company’s long-term
incentive plans) before September 15, 2017. The sale of the Enova
shares will generate additional cash flows. The Company’s
investment in Enova common stock was $40.4 million as of
March 31, 2016, based on a quoted market price per share of
$6.31.
Locations
- The Company ended the first quarter
with 819 lending locations in 20 states in the United States.
During the twelve months ended March 31, 2016, the Company
closed or sold 30 locations. Consistent with the Company’s strategy
to deemphasize its consumer lending activities, 21 of the locations
closed or sold were locations that offered consumer loans, of which
19 of those locations offered consumer loans as their primary
product. The closed or sold locations also included nine less
profitable, pawn-lending-only locations that were closed during the
twelve months ended March 31, 2016. In addition, the Company
eliminated the consumer loan product in 36 of its pawn lending
locations during the twelve months ended March 31, 2016.
Including consumer-loan-lending locations closed or sold and
locations where the consumer loan product was eliminated, consumer
lending activities were discontinued in 57 of the Company’s
locations during the twelve months ended March 31, 2016.
- During the current quarter, the Company
closed three locations, of which one location offered consumer
loans. In addition, the Company eliminated the consumer loan
product in 28 of its pawn lending locations during the current
quarter. The Company expects to eliminate consumer lending
activities in approximately 18 locations in the second quarter of
2016 as it continues to deemphasize the consumer loan product and
continue its focus on pawn lending.
Outlook for the Second Quarter of 2016
and the 2016 Fiscal Year
Management believes that the opportunities for growth in revenue
and earnings will be largely associated with customer demand for
the products and services provided by the Company, which primarily
take the form of pawn loans, and its ability to profitably
liquidate merchandise obtained primarily from unredeemed pawn
loans. During the first quarter of 2016, the typical seasonal
decline in loan balances was consistent with what the Company
experienced during the first quarter of 2015, even though
management believes that the Federal Income Tax refund season began
a few weeks later than the Company anticipated. Typically,
customers use a portion of these refunds to pay back existing loans
and for the purchase of merchandise. At the outset of the second
quarter the Company expects loan balances to begin to recover,
consistent with routine seasonal business trends. The rate of this
increase and the timing of the increase in pawn loan balances has a
significant influence on future financial results.
Based on management's views and on the preceding factors,
management expects net income for the second quarter of 2016 to be
between 12 cents to 18 cents per share, compared to net income of 8
cents per share for the second quarter of 2015. Net income for the
second quarter of 2015 of $2.1 million ($0.08 per share) included a
$1.1 million (before taxes) gain on disposition of equity
securities and a $0.6 million (before taxes) loss on the early
extinguishment of debt. Excluding these non-operating items, which
in aggregate increased income by $0.5 million before taxes ($0.4
million, or $0.02 per share after taxes), adjusted net income, a
non-GAAP measure, was $1.7 million ($0.06 per share) for the second
quarter of 2015.
At this time, management also increases its previously reported
expectations for its fiscal year 2016 adjusted EBITDA with an
anticipated range of between $125 to $133 million, which management
estimates will generate between $1.30 and $1.50 in net income per
share. This compares to reported net income of $1.01 per share for
fiscal year 2015.
The outlook for the second quarter and remainder of 2016
included in this press release do not take into account the pending
merger of equals with First Cash that was announced today, and the
Company’s guidance is based solely on the Company’s operations.
About the Company
As of March 31, 2016, Cash America International, Inc. (the
“Company” or “Cash America”) operated 892 total locations in the
United States offering pawn lending and related services to
consumers and included the following:
- 819 lending locations in 20 states in
the United States primarily under the names “Cash America Pawn,”
“SuperPawn,” “Cash America Payday Advance,” and “Cashland;”
and
- 73 check cashing centers (all of which
are unconsolidated franchised check cashing centers) operating in
12 states in the United States under the name “Mr. Payroll.”
For additional information regarding the Company and the
services it provides, visit the Company’s website located at
http://www.cashamerica.com or download
the Cash America mobile app without cost from the App StoreSM and
on Google PlayTM.
App Store is a service mark of Apple Inc., and Google Play is a
trademark of Google Inc.
Non-GAAP Measures
The Non-GAAP Disclosure sections included in the attachments to
this press release contain a reconciliation of non-GAAP information
and a discussion of the reasons why the Company’s management
believes that presentation of the non-GAAP financial measures
discussed above provide useful information to investors regarding
the Company’s financial condition and results of operations.
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 and the proposed business combination with First Cash. 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, compliance with or changes in laws, rules and regulations
applicable to the Company's business or changes in the
interpretation or enforcement thereof; the regulatory and
examination authority of the Consumer Financial Protection Bureau;
the effect of any current or future litigation proceedings,
including an unfavorable outcome in an outstanding lawsuit relating
to the Company’s 5.75% Senior Notes due 2018 even though the
Company believes the lawsuit is without merit and will vigorously
defend its position, and any judicial decisions or rule-making that
affects the Company, its products or the legality or enforceability
of its arbitration agreements; decreased demand for the Company’s
products and services and changes in competition; fluctuations in
the price of gold and changes in economic conditions; public
perception of the Company’s business and the Company’s business
practices; accounting and income tax risks related to goodwill and
other intangible asset impairment, certain tax positions taken by
the Company and other accounting matters that require the judgment
of management; the Company’s ability to attract and retain
qualified executive officers; risks related to the Company’s
financing, such as compliance with financial covenants in the
Company’s debt agreements, the Company’s ability to satisfy its
outstanding debt obligations, to refinance existing debt
obligations or to obtain new capital; risks related to
interruptions to the Company’s business operations, such as a
prolonged interruption in the Company’s operations of its
facilities, systems or business functions, cyber-attacks or
security breaches or the actions of third parties who provide,
acquire or offer products and services to, from or for the Company;
risks related to the expansion and growth of the Company’s
business, including the Company’s ability to open new locations in
accordance with plans or to successfully integrate newly acquired
businesses into its operations; risks related to the 2014 spin-off
of the Company’s former E-Commerce Division that comprised its
e-commerce segment, Enova International, Inc.; fluctuations in the
price of the Company’s common stock; the effect of any of the above
changes on the Company’s business or the markets in which the
Company operates; and other risks and uncertainties indicated in
the Company’s filings with the SEC. The closing of the proposed
business combination with First Cash is subject to the approval of
the stockholders of First Cash and the Company, regulatory
approvals and other customary closing conditions. There is no
assurance that such conditions will be met or that the proposed
transaction will be consummated within the expected time frame, or
at all, or that the benefits of the business combination will be
achieved. 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,” “intends,” “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. Additional information concerning risks related to the
business, the proposed business combination with First Cash and
other risk factors is also contained in the Company’s recently
filed Annual Reports on Form 10-K, subsequent Quarterly Reports on
Form 10-Q, Current Reports on Form 8-K, and other SEC filings. 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.
Additional Information and Where to Find It
This communication is for informational purposes only and does
not constitute an offer to sell or the solicitation of an offer to
buy any securities or a solicitation of any vote or approval with
respect to the proposed transaction between First Cash and Cash
America or otherwise, nor shall there be any sale, issuance or
transfer of securities in any jurisdiction in contravention of
applicable law. No offer of securities shall be made except by
means of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended. The proposed transaction
between First Cash and Cash America will be submitted to the
respective stockholders of First Cash and Cash America for their
consideration. First Cash will file with the SEC a registration
statement on Form S-4 that will include a joint proxy statement of
First Cash and Cash America that also constitutes a prospectus of
First Cash. First Cash and Cash America will deliver the joint
proxy statement/prospectus to their respective stockholders as
required by applicable law. First Cash and Cash America also plan
to file other documents with the SEC regarding the proposed
transaction. This communication is not a substitute for any
prospectus, proxy statement or any other document which First Cash
or Cash America may file with the SEC in connection with the
proposed transaction. INVESTORS AND SECURITY HOLDERS OF FIRST
CASH AND CASH AMERICA ARE URGED TO READ THE JOINT PROXY
STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS THAT WILL BE
FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
FIRST CASH, CASH AMERICA, THE PROPOSED TRANSACTION AND RELATED
MATTERS. Investors and stockholders will be able to obtain free
copies of the joint proxy statement/prospectus and other documents
containing important information about First Cash and Cash America,
once such documents are filed with the SEC, through the website
maintained by the SEC at www.sec.gov. First Cash and Cash America
make available free of charge at ww2.firstcash.com and
www.cashamerica.com, respectively (in the “Investor” or “Investor
Relations” section, as applicable), copies of materials they file
with, or furnish to, the SEC.
Participants in the Merger Solicitation
First Cash, Cash America, and certain of their respective
directors, executive officers and other members of management and
employees may be deemed to be participants in the solicitation of
proxies from the stockholders of First Cash and Cash America in
connection with the proposed transaction. Information about the
directors and executive officers of First Cash is set forth in its
proxy statement for its 2015 annual meeting of stockholders, which
was filed with the SEC on April 30, 2015. Information about the
directors of Cash America is set forth in its proxy statement for
its 2016 annual meeting of shareholders, which was filed with the
SEC on April 7, 2016, and information about the executive officers
of Cash America is set forth in Cash America’s Annual Report on
Form 10-K, which was filed with the SEC on February 26, 2016. These
documents can be obtained free of charge from the sources indicated
above. Other information regarding those persons who are, under the
rules of the SEC, participants in the proxy solicitation and a
description of their direct and indirect interests, by security
holdings or otherwise, will be contained in the joint proxy
statement/prospectus and other relevant materials to be filed with
the SEC when they become available.
CASH AMERICA INTERNATIONAL, INC. AND
SUBSIDIARIES HIGHLIGHTS OF CONSOLIDATED RESULTS OF
OPERATIONS
(dollars in thousands, except per share
data)
(Unaudited)
Three Months Ended March 31, 2016 2015
Consolidated
Operations: Total Revenue $ 277,205 $ 271,762 Net Revenue
144,044 147,091 Total Expenses 124,296
130,857
Income from Operations $ 19,748 $ 16,234
Income before Income Taxes 15,955 12,757
Net Income
$ 10,633 $ 7,845
Earnings Per Share:
Net Income: Basic $ 0.43 $ 0.27 Diluted $ 0.42 $ 0.27
Weighted average common shares outstanding: Basic 24,811 28,692
Diluted 25,121 28,780
CASH AMERICA
INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE
SHEETS
(dollars in thousands, except per share
data)
(Unaudited) March 31, December 31, 2016 2015 2015
Assets Current assets: Cash and cash equivalents $ 48,321 $
120,058 $ 23,153 Pawn loans 210,724 210,060 248,713 Merchandise
held for disposition, net 223,660 196,024 241,549 Pawn loan fees
and service charges receivable 44,942 43,784 52,798 Consumer loans,
net 23,986 31,897 31,291 Income taxes receivable — 2,990 — Prepaid
expenses and other assets 21,828 25,589 22,642 Investment in equity
securities 40,368 116,261
42,613 Total current assets 613,829 746,663
662,759 Property and equipment, net 164,245 191,749 171,598
Goodwill 488,022 487,569 488,022 Intangible assets, net 38,000
44,194 39,536 Other assets 6,719
5,815 6,823 Total assets $
1,310,815 $ 1,475,990 $ 1,368,738
Liabilities and Equity Current liabilities: Accounts
payable and accrued expenses $ 60,554 $ 63,214 $ 74,586 Customer
deposits 21,555 19,828 18,864 Income taxes currently payable
3,524 — 3,063
Total current liabilities 85,633 83,042 96,513 Deferred tax
liabilities 66,631 93,832 64,372 Other liabilities 653 927 723
Long-term debt 179,173 192,838
208,971 Total liabilities $
332,090 $ 370,639 $ 370,579
Equity: Common stock, $0.10 par value per share, 80,000,000 shares
authorized, 30,235,164 shares issued 3,024 3,024 3,024 Additional
paid-in capital 82,620 84,650 86,557 Retained earnings 1,061,221
1,036,794 1,052,567 Accumulated other comprehensive income 13,492
62,099 14,842 Treasury shares, at cost (6,080,997 shares, 2,525,192
shares and 5,362,684 shares as of March 31, 2016 and 2015, and as
of December 31, 2015, respectively) (181,632 )
(81,216 ) (158,831 ) Total equity
978,725 1,105,351
998,159 Total liabilities and equity $ 1,310,815
$ 1,475,990 $ 1,368,738
CASH AMERICA INTERNATIONAL, INC. AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share
data)
(Unaudited)
Three Months Ended March 31, 2016 2015
Revenue Pawn
loan fees and service charges $ 79,685 $ 77,313 Proceeds from
disposition of merchandise 178,297 172,213 Consumer loan fees
18,107 20,319 Other 1,116 1,917
Total Revenue 277,205
271,762
Cost of Revenue Disposed merchandise
129,218 119,884 Consumer loan loss provision 3,943
4,787
Total Cost of Revenue
133,161 124,671
Net
Revenue 144,044 147,091
Expenses Operations and administration 110,791
116,338 Depreciation and amortization 13,505
14,519
Total Expenses
124,296 130,857
Income from
Operations 19,748 16,234 Interest expense (3,919 ) (3,644 )
Interest income 20 2 Foreign currency transaction gain — 39 Loss on
early extinguishment of debt (11 ) — Gain on disposition of equity
securities 117 126
Income before Income Taxes 15,955 12,757 Provision for
income taxes 5,322 4,912
Net Income $ 10,633 $ 7,845
Earnings Per Share: Net Income: Basic $ 0.43 $ 0.27 Diluted
$ 0.42 $ 0.27 Weighted average common shares outstanding: Basic
24,811 28,692 Diluted 25,121 28,780 Dividends declared per common
share $ 0.080 $ 0.050
CASH
AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES PAWN LOAN
METRICS
The following tables outline certain data
related to pawn loan activities for the Company as of and for the
three months ended March 31, 2016 and 2015 (dollars in
thousands except where otherwise noted):
As of March 31, 2016 2015
$ Change
% Change Ending pawn loan balances
$ 210,724 $
210,060 $ 664 0.3 % Ending merchandise balance, net
$
223,660 $ 196,024 $ 27,636 14.1 %
Three Months
Ended March 31, 2016 2015
$ Change
% Change Pawn loan fees and service charges
$ 79,685
$ 77,313 $ 2,372 3.1 % Average pawn loan balance outstanding
$ 232,080 $ 229,935 $ 2,145 0.9 % Amount of pawn
loans written and renewed
$ 228,353 $ 222,176 $ 6,177
2.8 % Average amount per pawn loan (in ones)
$ 130 $
127 $ 3 2.4 % Annualized yield on pawn loans
138.1 %
136.4 %
CASH
AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES MERCHANDISE
DISPOSITION, GROSS PROFIT AND INVENTORY OPERATING DATA
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
generally the principal amount loaned on an item or the amount paid
for purchased merchandise. The following table summarizes the
proceeds from the disposition of merchandise and the related gross
profit for the three months ended March 31, 2016 and 2015
(dollars in thousands):
Three Months Ended March 31, 2016 2015
Retail Commercial Total Retail Commercial
Total Proceeds from disposition
$ 150,727 $
27,570 $ 178,297 $ 148,149 $ 24,064 $ 172,213
Gross profit on disposition
$ 49,600 $
(521 ) $ 49,079 $ 46,956 $ 5,373 $
52,329 Gross profit margin
32.9 % (1.9
)% 27.5 % 31.7 % 22.3 % 30.4 % Percentage of
total gross profit
101.1 % (1.1 )%
100.0 % 89.7 % 10.3 % 100.0 %
The table below summarizes the age of
merchandise held for disposition related to the Company’s pawn
lending operations as of March 31, 2016 and 2015, and
December 31, 2015 (dollars in thousands):
As of March 31, As of December 31, 2016
2015 2015
Amount % Amount % Amount % Jewelry - held
for one year or less
$ 131,340 58.0 % $
110,993 55.9 % $ 135,215 55.3 % Other merchandise - held for one
year or less
84,119 37.1
% 76,902 38.8 %
93,498 38.3 % Total merchandise held for one year or less
215,459 95.1 %
187,895 94.7 % 228,713
93.6 % Jewelry - held for more than one year
6,593
2.9 % 4,682 2.4 % 8,935 3.7 % Other merchandise -
held for more than one year
4,558
2.0 % 5,847 2.9 %
6,701 2.7 % Total merchandise held for more than one
year
11,151 4.9 % 10,529
5.3 % 15,636 6.4 % Merchandise held for
disposition, gross
$ 226,610 100.0
% $ 198,424 100.0 % $ 244,349 100.0 % Less:
Inventory valuation allowance
$ (2,950 )
$ (2,400 ) $ (2,800 ) Merchandise held for
disposition, net of allowance
$ 223,660
$ 196,024 $ 241,549
CASH AMERICA
INTERNATIONAL, INC. AND SUBSIDIARIES CONSUMER LOAN METRICS
AND BALANCES
The following table sets forth interest
and fees on consumer loans, the consumer loan loss provision and
consumer loan fees, net of the loss provision, related to consumer
loan activities for the Company for the three months ended
March 31, 2016 and 2015 (dollars in thousands except where
otherwise noted):
Three Months Ended March 31, 2016 2015
Short-term loans Installment loans Total
Short-term loans Installment loans Total Consumer loan fees
$ 11,631 $ 6,476 $ 18,107
$ 17,063 $ 3,256 $ 20,319 Less: consumer loan loss provision
2,367 1,576
3,943 3,119
1,668 4,787 Consumer loan fees, net of
loss provision
$ 9,264 $
4,900 $ 14,164 $
13,944 $ 1,588 $ 15,532
Year-over-year change - $
$ (4,680 ) $
3,312 $ (1,368 ) $ (2,610 ) $ (19 ) $
(2,629 ) Year-over-year change - %
(33.6 )%
208.6 % (8.8 )% (15.8 )% (1.2 )% (14.5
)%
Consumer loan loss provision as a % of
consumer loan fees
20.4 % 24.3
% 21.8 % 18.3 %
51.2 % 23.6 %
In addition to reporting consumer loans
owned by the Company and consumer loans guaranteed by the Company,
which are either items accounted for in accordance with generally
accepted accounting principals (“GAAP”) or disclosures required by
GAAP, the Company has provided combined consumer loans, which is a
non-GAAP measure that combines the consumer loans owned by the
Company and those guaranteed by the Company. In addition, the
Company has reported combined consumer loans written and renewed,
which is statistical data that is not included in the Company’s
financial statements.
Management believes these measures provide
investors with important information needed to evaluate the
magnitude of potential loan losses and the opportunity for revenue
performance of the consumer loan portfolio on an aggregate basis.
Management also believes that the comparison of the aggregate
amounts from period to period is more meaningful than comparing
only the amounts reflected on the Company’s balance sheet since
both revenue and the loss provision for consumer loans are impacted
by the aggregate amount of consumer loans owned by the Company and
those guaranteed by the Company as reflected in its financial
statements.
CASH AMERICA
INTERNATIONAL, INC. AND SUBSIDIARIES CONSUMER LOAN METRICS
AND BALANCES
The following tables provide additional
information related to each of the Company’s consumer loan products
as of and for the three months ended March 31, 2016 and 2015
(dollars in thousands):
Three Months Ended March 31, 2016 2015
Short-term loans Installment loans Total
Short-term loans Installment loans Total
Consumer loans written
and renewed(a) Company owned
$ 92,214
$ 1,196 $ 93,410 $ 134,477 $ 1,448 $
135,925 Guaranteed by the Company(b)
4,210
8,629
12,839 8,057
14,003 22,060 Combined consumer loans
written and renewed
$ 96,424
$ 9,825 $ 106,249
$ 142,534 $ 15,451 $ 157,985
As of March 31, 2016 2015
Ending consumer loan balances, gross Company owned
$
22,853 $ 3,384 $ 26,237 $ 30,308
$ 4,814 $ 35,122 Guaranteed by the Company(b)
773 6,914
7,687 1,717 6,980
8,697 Combined ending consumer loan
balances, gross(d)
$ 23,626
$ 10,298 $ 33,924
$ 32,025 $ 11,794 $ 43,819
Allowance and liability for losses Company owned
$ 1,164 $ 1,087 $ 2,251 $
2,034 $ 1,191 $ 3,225 Guaranteed by the Company(b)
26 494
520 215 1,026
1,241 Combined allowance and liability
for losses
$ 1,190 $
1,581 $ 2,771 $
2,249 $ 2,217 $ 4,466
Ending
consumer loan balances, net Company owned
$
21,689 $ 2,297 $ 23,986 $ 28,274
$ 3,623 $ 31,897 Guaranteed by the Company(b)
747 6,420
7,167 1,502 5,954
7,456
Combined ending consumer loan balances,
net(d)
$ 22,436 $ 8,717
$ 31,153 $ 29,776
$ 9,577 $ 39,353
Average amount outstanding per consumer
loan (in ones)(a)(c)
$ 446 $ 1,180
$ 466 $
1,556
Consumer loan
ratios:
Allowance and liability for losses as a % of combined ending
consumer loan balance, gross(d)
5.0 %
15.4 % 8.2
% 7.0 % 18.8 %
10.2 %
(a) The disclosure regarding the amount of
consumer loans written and renewed and the average amount per
consumer loan is statistical data that is not included in the
Company’s financial statements.
(b) The consumer loan balances guaranteed
by the Company represent loans originated by third-party lenders
through the credit services organization and credit access business
programs, so these balances are not recorded in the Company’s
financial statements. However, the Company has established a
liability for estimated losses in support of its guarantee of these
loans, which is reflected in the table above and included in the
Company’s consolidated balance sheets.
(c) The average amount outstanding per
consumer loan is calculated as the total amount of combined
consumer loans outstanding as of the end of the period divided by
the total number of combined consumer loans outstanding as of the
end of the period.
(d) Non-GAAP measure.
CASH AMERICA INTERNATIONAL, INC. AND
SUBSIDIARIES LOCATION INFORMATION
Locations
The following table sets forth, as of
March 31, 2016 and 2015, the number of Company-operated locations
that offered pawn lending, consumer lending, and other services, in
addition to franchised locations that offered check cashing
services. The Company provides these services in the United States
primarily under the names “Cash America Pawn,” “SuperPawn,” “Cash
America Payday Advance,” “Cashland” and “Mr. Payroll.” The
Company’s pawn and consumer lending locations operated in 20 and 21
states in the United States as of March 31, 2016 and 2015,
respectively. As of both March 31, 2016 and 2015, the
franchised check cashing centers operated in 12 states.
As of March 31, 2016 2015
Company-operated locations offering: Pawn lending only
574
545 Both pawn and consumer lending
224 271 Consumer lending
only
21 31 Total Company-operated locations
819 847 Franchised check cashing centers
73
80 Total
892 927
CASH AMERICA INTERNATIONAL, INC. AND
SUBSIDIARIESNON-GAAP DISCLOSURE
Non-GAAP Disclosure
In addition to the financial information prepared in conformity
with GAAP, the Company has provided certain historical non-GAAP
measures in the tables below, including (i) adjusted net income,
adjusted diluted net income per share, adjusted earnings, adjusted
earnings per share and adjusted income from operations
(collectively, the “Adjusted Earnings Measures”), and (ii) adjusted
EBITDA, which the Company defines as earnings excluding
depreciation, amortization, interest, foreign currency transaction
gains or losses, loss on early extinguishment of debt, gain on
disposition of equity securities and provision or benefit for
income taxes. Management also provides estimated adjusted EBITDA
and estimated free cash flow per share, which are non-GAAP
measures. Management defines estimated free cash flow per share as
estimated earnings per share excluding estimated depreciation and
amortization, less estimated cash paid for capital
expenditures.
Management believes that the presentation of these measures
provides users of the financial statements with greater
transparency and facilitates a more meaningful comparison of
operating results across a broad spectrum of companies with varying
capital structures, compensation strategies, derivative instruments
and depreciation and amortization methods. In addition, management
believes this information provides a more in-depth and complete
view of the Company’s financial performance, competitive position
and prospects for the future and may highlight trends in the
Company’s business that may not otherwise be apparent when relying
on financial measures calculated in accordance with GAAP.
Management also believes that non-GAAP measures are frequently used
by analysts and investors to analyze operating performance,
evaluate the Company’s ability to incur and service debt and its
capacity for making capital investments, and to help assess the
Company’s estimated enterprise value.
CASH AMERICA INTERNATIONAL, INC. AND
SUBSIDIARIESNON-GAAP DISCLOSURE
Management believes the non-GAAP measures included herein,
including the adjustments shown, provide more meaningful
information regarding the ongoing operating performance, provide
more useful period-to-period comparisons of operating results, both
internally and in relation to operating results of competitors,
enhance analysts’ and investors’ understanding of the core
operating results of the business and provide a more accurate
indication of the Company’s ability to generate cash flows from
operations. Therefore, management believes it is important to
clearly identify these measures for investors.
In calculating adjusted earnings and adjusted earnings per
share, management excludes intangible asset amortization, non-cash
equity based compensation and foreign currency transaction gains or
losses. In addition, management has determined that the adjustments
to the Adjusted Earnings Measures and adjusted EBITDA, as
applicable, included in the tables below are useful to analysts and
investors in order to allow them to compare the Company’s financial
results for the current period with the comparative period without
the effect of the below items, which management believes are less
frequent in nature:
- the loss on early extinguishment of
debt;
- the gain on disposition of equity
securities;
- severance and other employee-related
costs for administrative and operations staff reductions in
connection with the Company’s reorganization to better align the
corporate and operating cost structure with its remaining
storefront operations (the “Reorganization”) after the Company
completed the distribution of approximately 80% of the outstanding
shares of Enova International, Inc. common stock to the Company’s
shareholders in 2014;
- the loss on significant divestitures of
non-strategic operations; and
- charges related to a significant
litigation settlement in 2013 (the “2013 Litigation
Settlement”).
In addition to the presentation of Adjusted EBITDA for the three
months ended March 31, 2016 and 2015, Adjusted EBITDA is
presented for the trailing twelve months ended March 31, 2016 and
2015. Therefore, certain adjusting items that occurred in the
second, third and fourth quarters of 2015 and 2014 are presented in
the adjusted EBITDA table for the trailing twelve months ended
March 31, 2016 and 2015.
Management provides non-GAAP financial information for
informational purposes and to enhance understanding of the
Company’s GAAP consolidated financial statements. Readers should
consider the information in addition to, but not instead of or
superior to, its financial statements prepared in accordance with
GAAP. This non-GAAP financial information may be determined or
calculated differently by other companies, limiting the usefulness
of those measures for comparative purposes.
CASH AMERICA INTERNATIONAL, INC. AND
SUBSIDIARIES NON-GAAP DISCLOSURE ADJUSTED EARNINGS
MEASURES AND ADJUSTED EBITBDA
The following table provides a
reconciliation for the three months ended March 31, 2016 and
2015, between net income and diluted net income per share
calculated in accordance with GAAP to the Adjusted Earnings
Measures, which are shown net of tax (dollars in thousands, except
per share data):
Three Months Ended March 31, 2016 2015
$
Per Diluted Share(a)
$
Per Diluted Share(a)
Net income and diluted net income per share
$ 10,633
$ 0.42 $ 7,845 $ 0.27 Adjustments (net of tax): Loss
on early extinguishment of debt
7 — — — Gain on
disposition of equity securities
(75 ) — (81 )
— Reorganization expenses
—
— 537 0.02
Adjusted net income and adjusted diluted net income per share
10,565 0.42
8,301 0.29 Other adjustments (net of
tax): Intangible asset amortization
968 0.04 1,029
0.04 Non-cash equity-based compensation
1,117 0.04
1,006 0.03 Foreign currency transaction gain
—
— (25 ) —
Adjusted earnings and adjusted earnings per share
$
12,650 $ 0.50 $ 10,311
$ 0.36
(a) Diluted shares are calculated by
giving effect to the potential dilution that could occur if
securities or other contracts to issue common shares were exercised
and converted into common shares during the period.
The following table provides a
reconciliation for the three months ended March 31, 2016 and
2015, between net income calculated in accordance with GAAP to
adjusted income from operations and adjusted EBITDA (dollars in
thousands):
Three Months Ended March 31, 2016 2015 Net
income
$ 10,633 $ 7,845 Provision for income taxes
5,322 4,912 Gain on disposition of equity securities
(117 ) (126 ) Loss on early extinguishment of debt
11 — Foreign currency transaction gain
— (39 )
Interest expense, net
3,899 3,642 Adjustments:
Reorganization expenses
—
853 Adjusted income from operations
19,748 17,087 Depreciation and
amortization expenses
13,505
14,519 Adjusted EBITDA
$ 33,253
$ 31,606
CASH AMERICA INTERNATIONAL, INC. AND
SUBSIDIARIES NON-GAAP DISCLOSURE ADJUSTED EARNINGS
MEASURES AND ADJUSTED EBITBDA
The table below outlines the gross
amounts, the impact of income taxes and the net amounts for each of
the adjustments included in the previous tables (dollars in
thousands):
Three Months Ended March 31, 2016 2015
Pre-tax Tax After-tax Pre-tax
Tax After-tax Loss on early extinguishment of debt
$ 11 $ 4 $ 7 $ — $ — $ —
Gain on disposition of equity securities
(117 )
(42 ) (75 ) (126 ) (45 ) (81 )
Reorganization expenses
—
— — 853
316 537 Total
Adjustments
$ (106 ) $
(38 ) $ (68 ) $
727 $ 271 $ 456
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NON-GAAP DISCLOSURE ADJUSTED EBITDA
The following table provides a
reconciliation between net income (loss), which is the nearest GAAP
measure presented in the Company’s financial statements, to
adjusted EBITDA (dollars in thousands):
Trailing 12 Months Ended March 31, 2016
2015 Net income (loss)
$ 30,354 $ (5,779 ) Provision
for income taxes
15,888 3,131 Gain on disposition of equity
securities
(1,679 ) (126 ) Loss on early
extinguishment of debt
618 21,007 Foreign currency
transaction loss (gain)
7 (154 ) Interest expense, net
14,614 17,211 Depreciation and amortization expenses
55,237 60,318 Adjustments: Reorganization expenses
—
8,391 Loss on divestitures
— 5,176 2013 Litigation
Settlement
— 375
Adjusted EBITDA
$ 115,039 $
109,550 Adjusted EBITDA margin calculated as follows: Total
revenue
$ 1,034,934 $ 1,081,823 Adjusted EBITDA
$ 115,039 $ 109,550
Adjusted EBITDA as a percentage of total revenue
11.1 % 10.1 %
The table below outlines the gross
amounts, the impact of income taxes and the net amounts for each of
the adjustments included in the previous table (dollars in
thousands):
Trailing 12 Months Ended March 31, 2016 2015
Pre-tax Tax After-tax Pre-tax Tax After-tax
Gain on disposition of equity securities
$ (1,679
) $ (596 ) $ (1,083
) $ (126 ) $ (45 ) $ (81 ) Loss on early extinguishment of
debt
618 229 389 21,007 7,773 13,234
Reorganization expenses
— — — 8,391 3,105
5,286 Loss on divestitures
— — — 5,176 (1,268
) 6,444 2013 Litigation Settlement
—
— —
375 139 236
Total Adjustments
$ (1,061 )
$ (367 ) $ (694 )
$ 34,823 $ 9,704 $ 25,119
CASH AMERICA INTERNATIONAL, INC. AND
SUBSIDIARIES NON-GAAP DISCLOSURE ESTIMATED ADJUSTED
EBITDA
The following table reconciles estimated
income before income taxes to estimated Adjusted EBITDA, a non-GAAP
measure (dollars in thousands):
Estimated Results (a) For Year Ended
December 31, 2016 Low High (Unaudited) Estimated
income before income taxes $ 53,000 $ 61,000 Interest expense
16,000 16,000 Depreciation and amortization 56,000
56,000 Estimated Adjusted EBITDA $ 125,000
$ 133,000
(a) As of the Company press release dated
April 28, 2016.
CASH AMERICA INTERNATIONAL, INC. AND
SUBSIDIARIES NON-GAAP DISCLOSURE ESTIMATED EARNINGS
PER SHARE AND ESTIMATED FREE CASH FLOW PER SHARE
The table below shows an estimated range
of earnings per share, in addition to an estimated range of free
cash flow per share. The financial measure of free cash flow per
share has limitations as it does not represent the residual cash
flow available for discretionary expenditures as certain components
of the Company’s consolidated statement of cash flows are omitted.
Therefore, estimated free cash flow per share should be evaluated
in conjunction with the Company’s consolidated statement of cash
flows.
A reconciliation is shown for the years
ended December 31, 2016, between estimated net income per share,
which is the nearest GAAP measure presented in the Company’s
financial statements, to estimated free cash flow per share. For
per-share amounts shown for the year ended December 31, 2016,
amounts are based on an estimated number of diluted weighted
average common shares outstanding for the year ended December 31,
2016.
Estimated Results (a) For the year ended
December 31, 2016 Low High
(Unaudited) Estimated earnings per share $ 1.30 $ 1.50 Depreciation
and amortization expenses (b) 2.20 2.20 Capital expenditures (c)
(1.02 ) (1.02 ) Estimated free cash
flow per share $ 2.48 $ 2.68
(a) As of the Company press release dated
April 28, 2016.
(b) Assumes approximately $56.0 million of
depreciation and amortization for the year ended December 31,
2016.
(c) Assumes approximately $26.0 million of
capital expenditures for the year ended December 31, 2016.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160428005755/en/
Cash America International, Inc.Thomas A. Bessant,
Jr., 817-335-1100
Listed Funds Tru (NYSE:CSH)
Gráfico Histórico do Ativo
De Mai 2024 até Jun 2024
Listed Funds Tru (NYSE:CSH)
Gráfico Histórico do Ativo
De Jun 2023 até Jun 2024