Cash America International, Inc. (NYSE:PWN) announced today that net income increased 20% in the first three months of fiscal 1998 compared to the prior year.
Net earnings reached $4,534,000 (18 cents per share) for the three months ended March 31, 1998 compared to $3,790,000 (15 cents per share) for the three months ended March 31, 1997. Total revenue increased 10% in the first quarter of 1998 to $84,194,000 from $76,519,000 in the first quarter of 1997.
The earnings increase was driven by a 44% increase in net earnings from the Company’s core lending activities. Lending operations produced net earnings of $5,528,000 in the first three months of 1998 versus $3,844,000 during the same period in 1997. The first quarter is a significant period from a seasonal standpoint and Cash America benefited from higher loan balances coming into the quarter. Net revenue from lending activities were up 10% in the three month period ended March 31, 1998 reaching $47.5 million compared to $43.2 million in 1997.
Check cashing operations, conducted through Cash America’s wholly owned subsidiary Mr. Payroll Corporation, reported a net loss of $941,000 in the first three months of 1998, almost 4 cents per share, compared to a loss of $54,000 in the same period last year. Mr. Payroll Corporation developed a fully automated check cashing machine in June of 1997 and began commercial deployment in late 1997 and in the first quarter of 1998.
Commenting on the results of the first quarter, Chairman and Chief Executive Officer Jack R. Daugherty said, “Cash America posted the strongest first quarter performance in the Company’s history in its core lending business. We reached earnings goals through the execution of a consistent strategy of loan growth and rapid liquidation of merchandise in 1997 and kept the momentum going into 1998. Higher loan balances generated increased finance and service charge revenue and the disposition of merchandise available for sale was improved over the prior year, leading to significant gains in net revenue from lending activities.”
Daugherty added, “The performance of our core business allowed us to support the development of Mr. Payroll operations during the quarter. The potential benefits of Mr. Payroll’s check cashing activities will be realized in future years and our investment today is necessary in order to have the opportunity to achieve its long term objectives.”
Also during the quarter, Cash America announced that it had added 14 new lending locations and entered into a letter of intent to acquire a 40 unit pawnshops chain during the second quarter of 1998. The additions further the Company’s standing as the largest operator of pawnshops.
Additionally, the Company announced that the Board of Directors, at its regularly scheduled quarterly meeting, declared a $0.0125 (1.25 cents) per share cash dividend on common stock outstanding. The dividend will be paid to shareholders of record on May 5, 1998 and will be paid at the close of business on May 19, 1998.
Cash America International, Inc. is a diversified provider of specialty finance services to individuals in the United States, United Kingdom and Sweden. Cash America is the largest provider of secured non-recourse loans to individuals, commonly referred to as pawn loans, through 415 locations in 16 states and two foreign countries. In addition, the Company provides check cashing services through its wholly owned subsidiary, Mr. Payroll Corporation, and rental services through its wholly owned subsidiary, Express Rent A Tire, Inc.
This release contains forward-looking statements about the business, financial condition and prospects of Cash America International, Inc. and Mr. Payroll Corporation (“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, changes in demand for the Company’s services, changes in competition, the ability of the Company to open new operating units in accordance with its plans, economic conditions, real estate market fluctuations, interest rate fluctuations, changes in the capital markets, changes in tax and other laws and governmental rules and regulations applicable to the Company’s business, and other risks 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, and, in many cases, the Company cannot predict all of the risks and uncertainties that could cause its actual results to differ materially from those indicated by the forward-looking statements.
Cash America International, Inc.
Highlights of Consolidated Results of Operations
(In thousands, except per share data)
Three Months Ended
Total Revenue $ 84,194 $ 76,519
Net Revenue 48,698 44,058
Total Operating Expenses 38,416 35,125
Income from Operations 10,282 8,933
Interest Expense 3,007 2,806
Net Income $ 4,534 $ 3,790
Net Income Per Share – Basic $ 0.19 $ 0.16
Net Income Per Share – Diluted $ 0.18 $ 0.15
Weighted Average Shares – Basic 24,429 24,245
Weighted Average Shares – Diluted 25,633 24,875
Lending Operations —
Total Revenue $ 82,112 $ 75,635
Net Revenue 47,498 43,174
Total Operating Expenses 35,737 34,225
Income from Operations 11,761 8,949
Check Cashing Operations —
Total Revenue 1,529 884
Net Revenue 795 884
Total Operating Expenses 2,214 900
Loss from Operations (1,419) (16)
Rental Operations —
Total Revenue 553 —
Net Revenue 405 —
Total Operating Expenses 465 —
Loss from Operations (60) —
Financial and Operational
Data as of: 3/31/98 3/31/97 12/31/97
——– ——– ——–
Lending Operations —
Loans Outstanding $108,907 $101,732 $112,240
for Disposition 51,585 45,455 53,468
Number of Locations
(not in thousands) 415 385 401
Amounts Per Location —
Loans Outstanding $ 262 $ 264 $ 280
for Disposition 124 118 133
Loans Outstanding $ 176 $ 173 $ 199
for Disposition 138 134 150
Check Cashing Operations —
Average Number of Units
During the Period (not in thousands) —
Cashing Units 146 150 150
Cashing Machines 32 — 5
Annualized Amount of
Checks Cashed Per Average Unit —
Cashing Units $ 6,522 $ 5,488 $ 5,017
Cashing Machines 2,348 — 1,733