<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________________ to _______________
Commission File Number 1-9733
CASH AMERICA INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
TEXAS 75-2018239
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1600 WEST 7TH STREET
FORT WORTH, TEXAS 76102
(Address of principal executive offices) (Zip Code)
(817) 335-1100
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
-------- --------
APPLICABLE ONLY TO CORPORATE ISSUERS:
28,730,386 common shares, $.10 par value, were outstanding as of October 31,
1995
================================================================================
<PAGE> 2
CASH AMERICA INTERNATIONAL, INC.
INDEX TO 10-Q
PART I. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets - September 30, 1995
and 1994 and December 31, 1994................................... 1
Consolidated Statements of Income - Three Months and
Nine Months Ended September 30, 1995 and 1994.................... 2
Consolidated Statements of Stockholders' Equity -
Nine Months Ended September 30, 1995 and 1994...............,.... 3
Consolidated Statements of Cash Flows -
Nine Months Ended September 30, 1995 and 1994.................... 4
Notes to Consolidated Financial Statements....................... 5
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations......... 10
PART II. OTHER INFORMATION............................................ 21
SIGNATURE.............................................................. 22
</TABLE>
<PAGE> 3
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands) (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
September 30 Dec 31
1995 1994 1994
---------- ---------- ----------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 6,980 $ 2,998 $ 4,827
Service charges receivable 11,678 19,057 18,626
Loans 87,236 79,742 78,095
Inventory, net 59,085 78,004 80,894
Prepaid expenses and other 4,965 3,849 6,319
Deferred tax asset 12,891 560 475
---------- ---------- ----------
Total current assets 182,835 184,210 189,236
Property and equipment, net 66,138 60,350 63,241
Intangible assets, net 64,355 66,002 64,915
Other assets 8,532 5,527 6,865
---------- ---------- ----------
Total assets $ 321,860 $ 316,089 $ 324,257
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 8,371 $ 10,462 $ 13,790
Customer layaway deposits 4,453 3,795 3,576
Income taxes currently payable 1,706 2,367 3,661
---------- ---------- ----------
Total current liabilities 14,530 16,624 21,027
Long-term debt:
Bank lines of credit 85,738 91,728 89,796
Notes payable - TIAA 50,000 30,000 30,000
---------- ---------- ----------
135,738 121,728 119,796
Stockholders' equity:
Common stock, $.10 par value per
share, 80,000,000 shares authorized 3,024 3,024 3,024
Paid in surplus 121,828 121,094 121,481
Retained earnings 56,614 65,136 70,081
Foreign currency translation adjustment (3,097) (3,362) (3,692)
---------- ---------- ----------
178,369 185,892 190,894
Less - shares held in treasury, at cost (6,777) (8,155) (7,460)
---------- ---------- ----------
Total stockholders' equity 171,592 177,737 183,434
---------- ---------- ----------
Total liabilities and stockholders' equity $ 321,860 $ 316,089 $ 324,257
========== ========== ==========
</TABLE>
- --------------------------------------------------------------------------------
See notes to consolidated financial statements.
Page 1
<PAGE> 4
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share) (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1995 1994 1995 1994
<S> <C> <C> <C> <C>
PAWN SERVICE CHARGES $ 20,106 $ 29,063 $ 58,158 $ 75,087
GROSS PROFIT FROM SALES
Sales 37,530 34,198 119,845 100,691
Cost of sales 21,749 28,405 69,784 81,682
---------- ---------- ----------- ----------
Gross profit 15,781 5,793 50,061 19,009
---------- ---------- ----------- ----------
NET REVENUES 35,887 34,856 108,219 94,096
---------- ---------- ----------- ----------
OPERATING EXPENSES
Operations 22,041 19,650 64,349 54,711
Administration 4,400 3,554 12,577 10,081
Amortization 893 892 2,742 2,626
Depreciation 3,000 2,293 8,598 6,215
---------- ---------- ----------- ----------
Total operating expenses 30,334 26,389 88,266 73,633
---------- ---------- ----------- ----------
Income from operations 5,553 8,467 19,953 20,463
Interest expense, net 2,713 1,757 7,700 3,920
Other (income)/expense 118 (64) 263 74
---------- ---------- ----------- ----------
Income before income taxes 2,722 6,774 11,990 16,469
Provision for income taxes 1,119 2,563 4,613 6,271
---------- ---------- ----------- ----------
Income before cumulative effect of a
change in accounting principle 1,603 4,211 7,377 10,198
Cumulative effect on prior years (to
December 31, 1994) of changing to a different
revenue recognition method (Note 2) (19,772)
---------- ---------- ----------- ----------
NET INCOME (LOSS) $ 1,603 $ 4,211 $ (12,395) $ 10,198
========== ========== =========== ==========
- -----------------------------------------------------------------------------------------------------------------------
Amounts per common share:
Income before cumulative effect of a
change in accounting principle $ 0.06 $ 0.15 $ 0.26 $ 0.35
Cumulative effect on prior years (to
December 31, 1994) of changing to a
different revenue recognition method (0.68)
---------- ---------- ----------- ----------
Net income (loss) $ 0.06 $ 0.15 $ (0.43) $ 0.35
========== ========== =========== ==========
Weighted average shares - Fully diluted: 28,815 28,869 28,914 28,933
- -----------------------------------------------------------------------------------------------------------------------
Pro forma amounts assuming the new revenue
recognition method is applied retroactively:
NET INCOME $ 1,603 $ 2,115 $ 7,377 $ 6,615
NET INCOME PER SHARE $ 0.06 $ 0.07 $ 0.26 $ 0.23
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to consolidated financial statements.
Page 2
<PAGE> 5
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Nine Months Ended September 30, 1995 and 1994
(Dollars in thousands, except shares) (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Foreign
Common Stock Treasury Stock Currency
------------------- Paid In Retained ------------------ Translation
Shares Amount Surplus Earnings Shares Amount Adjustment Total
------ ------- ------- -------- ------ ------ ---------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
December 31, 1994 30,235,164 $ 3,024 $ 121,481 $ 70,081 1,666,099 $ (7,460) $ (3,692) $ 183,434
Net loss (12,395) (12,395)
Dividends declared (1,072) (1,072)
Treasury shares reissued 285 (161,321) 683 968
Tax benefit from exercise
of stock options 62 62
Foreign currency
translation adjustment 595 595
---------- ------- --------- ---------- --------- --------- --------- ---------
Balance at
September 30, 1995 30,235,164 $ 3,024 $ 121,828 $ 56,614 1,504,778 $ (6,777) $ (3,097) $ 171,592
========== ======= ========= ========== ========= ========= ========= =========
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at
December 31, 1993 30,235,164 $ 3,024 $ 120,955 $ 56,004 1,832,137 $ (7,953) $ (5,308) $ 166,722
Net income 10,198 10,198
Dividends declared (1,066) (1,066)
Treasury shares acquired 68,500 (552) (552)
Treasury shares reissued 64 (76,431) 350 414
Tax benefit from exercise
of stock options 75 75
Foreign currency
translation adjustment 1,946 1,946
---------- ------- --------- ---------- --------- --------- --------- ---------
Balance at
September 30, 1994 30,235,164 $ 3,024 $ 121,094 $ 65,136 1,824,206 $ (8,155) $ (3,362) $ 177,737
========== ======= ========= ========== ========= ========= ========= =========
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to consolidated financial statements.
Page 3
<PAGE> 6
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands) (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Nine Months Ended
September 30
-----------------------
1995 1994
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Reconciliation of Net (Loss) Income to Net
Cash Provided By Operating Activities:
Net (loss) income $ (12,395) $ 10,198
Adjustments to reconcile net (loss) income to
net cash provided by operating activities:
Cumulative effect of accounting change 19,772
Amortization 2,742 2,626
Depreciation 8,598 6,215
Increase in service charges receivable (1,382) (3,860)
Increase in inventory (800) (13,362)
Decrease in prepaid expenses and other 761 385
Decrease in accounts payable
and accrued expenses (5,388) (122)
Increase in layaway deposits, net 875 978
Decrease in income taxes payable (2,092) (423)
Deferred taxes (852) (795)
---------- ----------
Net cash provided by operating activities 9,839 1,840
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Loans forfeited and transferred to inventory 61,421 50,613
Loans repaid or renewed 168,341 139,881
Loans made, including loans renewed (237,117) (202,878)
---------- ----------
Net increase in loans (7,355) (12,384)
Acquisitions (1,412) (11,693)
Investment in and advances to affilitates (1,300) (2,200)
Purchases of property and equipment (11,377) (17,182)
Proceeds from sales of property and equipment 1,230
---------- ----------
Net cash used by investing activities (21,444) (42,229)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net (payments) borrowings under bank lines of credit (5,950) 46,600
Proceeds from issuance of long-term debt 20,000
Payment of notes payable assumed (4,404)
Proceeds from issuance of stock, net 526 414
Treasury shares acquired (552)
Dividends paid (1,072) (1,066)
---------- ----------
Net cash provided by financing activities 13,504 40,992
---------- ----------
Effect of exchange rate changes on cash 254 150
---------- ----------
Increase in cash and cash equivalents 2,153 753
Cash and cash equivalents at beginning of period 4,827 2,245
---------- ----------
Cash and cash equivalents at end of period $ 6,980 $ 2,998
========== ==========
</TABLE>
- --------------------------------------------------------------------------------
See notes to consolidated financial statements.
Page 4
<PAGE> 7
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (UNAUDITED)
- ------------------------------------------------------
NOTE 1 - BASIS OF PRESENTATION
The accompanying consolidated financial statements include the
accounts of Cash America International, Inc. and its wholly owned subsidiaries
(the "Company"). All significant intercompany accounts and transactions have
been eliminated in consolidation. At September 30, 1995, the Company had a 49%
ownership interest in Mr. Payroll Corporation ("Mr. Payroll") and Express Rent
A Tire Ltd. ("Express") (see Note 5). The investments are being accounted for
using the equity method of accounting, whereby the Company records its 49%
share of earnings or losses of its affiliates in its consolidated financial
statements.
The financial statements as of September 30, 1995 and 1994 and for the
three months and nine months then ended are unaudited but, in management's
opinion, include all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of the results for such interim
periods. Operating results for the three months and nine months are not
necessarily indicative of the results that may be expected for the full fiscal
year.
Certain amounts in the consolidated statements of income for the three
and nine months ended September 30, 1994, have been reclassified to conform
with the presentation form adopted in 1995. These reclassifications have no
effect on the net income previously reported.
These financial statements and related notes should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's 1994 Annual Report to Stockholders.
NOTE 2 - CHANGE IN ACCOUNTING PRINCIPLE
In the third quarter of 1995, the Company changed its method of income
recognition on pawn loans (effective January 1, 1995). Under the new method,
the Company accrues pawn service charges for those loans that the Company deems
collection is probable based on historical statistics of loan redemptions. For
loans not repaid, the carrying value of the forfeited collateral ("Inventory")
is the lower of cost (cash amount loaned) or market. Pawn service charges were
previously accrued on all loans. For loans not repaid, the carrying value of
the forfeited collateral ("Inventory") was the lower of cost (cash amount
loaned plus accrued pawn service charges) or market.
Page 5
<PAGE> 8
The Company believes the accounting change provides a more timely
matching of revenues and expenses with which to measure results of operations.
The $19,772,000 cumulative effect of the accounting change on prior years (net
of a tax benefit of $11,611,000) is included in net income for the nine months
ended September 30, 1995. The effect of the accounting change on the three
months ended September 30, 1995 was to decrease net income by $1,761,000 ($.06
per share); the effect of the change on the nine months ended September 30,
1995 was to decrease income before cumulative effect of a change in accounting
principle $2,444,000 ($.08 per share) and net income $22,216,000 ($.77 per
share). These pro forma amounts reflect the effect of retroactive application
on pawn service charges, cost of sales, and related income taxes.
The effect of the change on the first and second quarters of 1995 is
as follows:
<TABLE>
<CAPTION>
Three Months Ended
---------------------------------
March 31, June 30,
1995 1995
-------------- ------------
(in thousands, except per share)
<S> <C> <C>
Net income as originally reported $ 3,353 $ 3,104
Effect of change in revenue recognition method (697) 14
-------------- -------------
Income before cumulative effect of a change in
accounting principle 2,656 3,118
Cumulative effect on prior years (to December 31, 1994)
of changing to a different revenue recognition method (19,772)
-------------- ------------
Net (Loss) Income as restated $ (17,116) $ 3,118
============== ============
Per share amounts:
Net income as originally reported $ .12 $ .11
Effect of change in revenue recognition method .02
-------------- ------------
Income before cumulative effect of a change
in accounting principle .09 .11
Cumulative effect on prior years (to December 31, 1994)
of changing to a different revenue recognition (.68)
method -------------- ------------
Net (Loss) Income as restated $ (.59) $ .11
============== =============
</TABLE>
Page 6
<PAGE> 9
NOTE 3 - ACQUISITION
On September 22, 1994, the Company acquired all of the outstanding
stock of Svensk Pantbelaning, a company operating a chain of ten pawnshops in
Sweden. The Company paid $5.4 million and assumed liabilities of $17 million,
consisting primarily of bank debt. The Company received $18 million of
tangible assets, consisting primarily of $16 million in pawn loans outstanding.
NOTE 4 - LONG-TERM DEBT
On June 7, 1995, the Company extended the maturity date and made
certain modifications to its $125,000,000 unsecured bank line of credit
originally entered into on June 29, 1993. The agreement was modified to extend
the maturity of $100,000,000 of the line of credit to April 30, 1998, with the
remaining $25,000,000 portion scheduled to mature on June 5, 1996. As of
September 30, 1995, no borrowings had been made under the $25,000,000 portion
of the bank line of credit, and $57,750,000 was borrowed against the
$100,000,000 commitment. The Company has the option each year to request a
one-year extension, thus moving the maturity date of the entire facility
forward one year. Interest is paid quarterly at rates determined at the
Company's option of either the bank's prime lending rate or LIBOR plus 1%. The
current interest rate is 7.02%. In addition, the agreement provides for
commitment fees of 3/8% per annum on the unused portion of $100,000,000 of the
commitment and .15% per annum on the unused portion of $25,000,000 of the
commitment. On May 3, 1995 the Company entered into an interest rate
protection agreement for the two years ending on May 5, 1997 that limits the
maximum LIBOR interest rate to 7% on $20,000,000 of debt.
On May 12, 1993, the Company issued $30,000,000 of "8.33% Senior
Notes", due May 1, 2003. Interest is payable on May 1 and November 1 of each
year. Mandatory annual payments of $4,285,714 commence May 1997. On May 28,
1993, the Company entered into two swap agreements for $10,000,000 each, under
which the Company receives a fixed rate of 4.87% and pays the bank a variable
rate (currently 6.0%) repriced every six months to the prevailing 6 month BBA
average LIBOR rate. The effective interest rate on the Senior Notes for the
period June 2, 1995, to December 2, 1995 is 9.14% after taking into account the
two swap transactions.
On July 7, 1995, the Company issued $20,000,000 of "8.14% Senior
Notes", due July 7, 2007. Interest is payable on January 7 and July 7 of each
year. Mandatory annual payments of $4,000,000 commence on July 7, 2003.
Proceeds from the note issuance were applied to the debt outstanding under the
Company's line of credit.
Page 7
<PAGE> 10
On September 21, 1994, in conjunction with the acquisition of Svensk
Pantbelaning, the Company's wholly owned subsidiary, CAII Pantbelaning AB
(CAIIP), established a 193,750,000 Swedish Kronor ("SEK") term loan. The term
loan matures three years from the date of inception and there is no scheduled
amortization of the principal balance prior to maturity. Interest is payable
based on the Stockholm InterBank Offered Rate (STIBOR) plus 1%, currently at
9.75%. As of September 30, 1995, SEK 193,750,000 (approximately $27,988,000)
was outstanding under the term loan. On June 2, 1995, CAIIP entered into a
floating-to-fixed interest rate exchange agreement. The agreement fixes the
interest rate on SEK 118,750,000 (approximately $17,154,000) at 10.94% through
August 17, 1998.
The Company's wholly owned subsidiary, Harvey & Thompson, Ltd., has a
committed 5 million pound sterling unsecured line of credit, which matures on
February 8, 1996, from a U.K. based commercial bank. Interest is payable
quarterly at an interest rate equal to the Bank's sterling cost of funds plus
60 basis points for borrowings less than 13 days and 55 basis points for
borrowings of 14 days or more. Harvey & Thompson, Ltd. pays a fee on the
unused portion of the line of credit of .15% per annum. The facility is
governed by a credit agreement which provides minimum levels of assets and net
worth which must be maintained by Harvey & Thompson. To date, Harvey &
Thompson has not borrowed under the line of credit.
NOTE 5 - INVESTMENTS IN AFFILIATES
On July 13, 1994, the Company invested $2 million to acquire a 49%
interest in Mr. Payroll, a private, Texas- based company which sells franchises
for check-cashing kiosks. The Company is operating franchised check-cashing
kiosks in some of its pawnshop locations.
In conjunction with its investment, the Company has entered into a
revolving credit agreement with Mr. Payroll which provides for maximum
borrowings of $1,500,000 from the Company. Interest is payable quarterly at
the LIBOR rate plus four percent. The entire unpaid principal balance is due
and payable in full on February 28, 1997. Mr. Payroll has granted the Company
a security interest in and lien on all of its assets. As of September 30,
1995, Mr. Payroll had borrowings outstanding of $1,500,000. Subsequent to
September 30, 1995, the Company entered into a second revolving credit
agreement with Mr. Payroll which provides for maximum borrowings of $500,000
from the Company. The terms are essentially the same as the initial revolving
credit agreement.
Page 8
<PAGE> 11
On September 20, 1995, the Company acquired a 49% interest in Express
Rent a Tire, Ltd. ("Express"), a private company which offers new tires and
wheels on a rent-to-own basis. In conjunction with its investment, the Company
has entered into a revolving credit agreement with Express which provides for
maximum borrowings of $2 million from the Company. Interest is payable
quarterly at the LIBOR rate plus four percent. The entire unpaid principal
balance is due and payable in full on February 28, 1998. Express has granted
the Company a security interest in and lien on all of its assets. As of
September 30, 1995, Express had borrowings outstanding of $400,000.
NOTE 6 - LITIGATION
The Company is a defendant in certain lawsuits encountered in the
ordinary course of its business. In the opinion of management, the resolution
of these matters will not have a material adverse effect on the Company's
financial position or results of operations.
Page 9
<PAGE> 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS FOR THE THREE MONTHS AND NINE MONTHS ENDED
SEPTEMBER 30, 1995 VERSUS THE COMPARABLE 1994 PERIOD
RESULTS OF OPERATIONS
During the third quarter of 1995, the Company changed its method of
income recognition on pawn loans (effective January 1, 1995). Under the new
method, the Company accrues pawn service charges for only those loans that the
Company deems collection to be probable based on historical statistics of loan
redemptions. For loans not repaid, the carrying value of the forfeited
collateral ("Inventory") is the lower of cost (cash amount loaned) or market.
Pawn service charges were previously accrued on all loans. For loans not
repaid, the carrying value of the forfeited collateral ("Inventory") was the
lower of cost (cash amount loaned plus accrued pawn service charges) or market.
During that period of time between the inception of a pawn loan and
the later sale of the forfeited collateral, the change in accounting principle
will not affect the amount of net revenues or earnings reported by the Company;
it will only affect the timing of net revenue and earnings recognition. The
new method will more closely align net revenue and earnings recognition with
the actual collection of cash from loan payments and the sale of forfeited
collateral.
The Company believes shareholder value can be enhanced by generating
higher returns on the capital employed by the Company. Recent changes in the
business environment, including competitive influences, have led the Company to
focus more clearly on the importance of generating higher cash-on-cash returns
in its business activities. The Company is taking steps to enhance its
position in the marketplace through new incentive compensation programs,
revised store configuration, and training programs with an emphasis on
rewarding the maximization of cash returns on capital employed. The Company
believes that reporting results of operations under the new accounting
principle will be more consistent with the measurement of cash returns.
The $19,772,000 cumulative effect of this accounting change on prior
years (net of a tax benefit of $11,611,000) reduced net income for the nine
months ended September 30, 1995. The net loss per share of $.43 for 1995 is
the result of the cumulative effect of the accounting change with respect to
income recognition on pawn loans. Earnings per share from operations for the
third quarter were $.06, compared to a pro forma $.07 for the third quarter of
1994 assuming retroactive application of the accounting change.
Page 10
<PAGE> 13
SUMMARY CONSOLIDATED FINANCIAL DATA
For purposes of management's discussion and analysis of results of
operations and financial condition, all comparisons to the three and nine
months ended September 30, 1995, reflect the pro forma effects of applying
the new accounting principle to the consolidated financial statements as if
the change had occurred on December 31, 1993.
THIRD QUARTER ENDED SEPTEMBER 30, 1995 vs
THIRD QUARTER ENDED SEPTEMBER 30, 1994
- --------------------------------------------------------------------------------
The following table sets forth selected consolidated financial data with
respect to the Company for the three months ended September 30, 1995 and 1994.
<TABLE>
<CAPTION>
($ in thousands)
Pro Forma
1995 1994 Change
-------- -------- --------
<S> <C> <C>
Pawn service charges $20,106 $17,602 14%
Gross profit from sales
Sales 37,530 34,198 10%
Cost of sales 21,749 20,272 7%
-------- -------- --------
Gross profit 15,781 13,926 13%
-------- -------- --------
Net Revenues 35,887 31,528 14%
-------- -------- --------
Other Data:
Gross profit as a percentage of sales 42.0% 40.7% 3%
Average annualized inventory turnover 1.5X 1.5X 0%
Annualized yield on loans 95% 106% (10)%
Average inventory balance per
average location in operation $157 $166 (5)%
Average loan balance per
average location in operation $227 $209 9%
Average pawn loan at end of
period (whole dollars) $90 $86 5%
Expenses as a percentage of net revenues:
Operations 61.4% 62.3% (1)%
Administration 12.3% 11.3% 9%
Depreciation and amortization 10.8% 10.1% 7%
Interest, net 7.6% 5.6% 36%
Locations in Operation:
Beginning of period 366 306
Acquired 0 10
Established 3 17
Combined --- ---
-------- --------
End of period 369 333 11%
======== ======== ========
Average number of locations in
operation during the period (a) 368 316 16%
======== ======== ========
</TABLE>
(a) Averages based on accumulation of month-end balances and dividing aggregate
total by total months in the period.
Page 11
<PAGE> 14
NINE MONTHS ENDED SEPTEMBER 30, 1995 vs
NINE MONTHS ENDED SEPTEMBER 30, 1994
- --------------------------------------------------------------------------------
The following table sets forth selected consolidated financial data with
respect to the Company for the nine months ended September 30, 1995 and 1994.
<TABLE>
<CAPTION>
($ in thousands)
Pro Forma
1995 1994 Change
-------- -------- --------
<S> <C> <C>
Pawn service charges $58,158 $46,527 25%
Gross profit from sales
Sales 119,845 100,691 19%
Cost of sales 69,784 58,810 19%
-------- -------- --------
Gross profit 50,061 41,881 20%
-------- -------- --------
Net Revenues 108,219 88,408 22%
-------- -------- --------
Other Data:
Gross profit as a percentage of sales 41.8% 41.6% 0%
Average annualized inventory turnover 1.6X 1.7X (6)%
Annualized yield on loans 96% 109% (12)%
Average inventory balance per
average location in operation $161 $158 2%
Average loan balance per
average location in operation $225 $191 18%
Average pawn loan at end of
period (whole dollars) $90 $86 5%
Expenses as a percentage of net revenues:
Operations 59.5% 61.9% (4)%
Administration 11.6% 11.4% 2%
Depreciation and amortization 10.5% 10.0% 5%
Interest, net 7.1% 4.4% 61%
Locations in Operation:
Beginning of period 340 280
Acquired 3 21
Established 28 35
Combined (2) (3)
-------- --------
End of period 369 333 11%
======== ======== ========
Average number of locations in
operation during the period (a) 359 300 20%
======== ======== ========
</TABLE>
(a) Averages based on accumulation of month-end balances and dividing aggregate
total by total months in the period.
Page 12
<PAGE> 15
IMPACT OF EXPANDING OPERATIONS
The Company expanded its operations over the 21-month period from
December 31, 1993 through September 30, 1995 with the addition of 94 pawnshops.
Seventy stores were started and 24 stores were acquired during the period, and
five stores were combined into existing locations for a net addition of 89
stores during the 21-month period. At September 30, 1995, the Company operated
369 pawnshops--325 in 14 states in the United States, 34 jewelry-only and
loan-only pawnshops in the United Kingdom operating under the name Harvey &
Thompson, Ltd., and 10 loan-only pawnshops which concentrate primarily in
jewelry in Sweden and operate under the name Svensk Pantbelaning. The group of
corporations which comprise the Swedish chain was acquired in September 1994 in
a cash transaction.
Net revenues (total revenues less cost of sales) increased 14% and
22%, respectively, for the three and nine month periods ending September 30,
1995 over the same periods of 1994, and is attributable to an approximate 16%
and 20% respectively, increase in average stores open during the periods, and
increased revenues in comparable stores. Net revenues on comparable stores
(those in operation more than one year) increased 2% for the three months and
6% for the nine months ending September 30, 1995.
PAWN SERVICE CHARGES
Pawn service charges for the three months and nine months ended
September 30, 1995 increased 14% and 25% over the comparable periods in 1994
due to an increase in the number of average locations in operation and
increases in pawn service charges on comparable same stores. Pawn service
charges on comparable stores increased approximately 1% in the third quarter
and by 7% for the first nine months of 1995 compared to 1994.
In addition to the increases in pawn service charges due to new
locations, the Company attributes the increase in pawn service charges for the
third quarter over the corresponding period in 1994 to a higher average loan
yield from domestic operations and the acquisition of Svensk Pantbelaning in
the third quarter of 1994. The total Company loan yield declined from 106% to
approximately 95%, while the domestic loan yield increased from 120% to 123%.
The decline in total Company loan yields is directly attributable to Svensk
Pantbelaning which has a higher amount per loan and a lower loan yield (of
approximately $250 and 46%, respectively) than the Company's other operations.
Page 13
<PAGE> 16
For the nine month period the increase in pawn service charges is due
primarily to new stores, an increase in pawn service charges of comparable
stores, and an increase of approximately 5% in the average dollar loan to $90
from $86 as the loan yields declined from 109% to 96% from the comparable
period in 1994.
SALES AND GROSS PROFIT
Sales for the three and nine months ended September 30, 1995,
increased 10% and 19%, respectively, compared to the same periods of 1994.
These increases are due primarily to the approximate 16% and 20% rise in
average locations noted above. Retail sales on comparable stores decreased
approximately 2% in the third quarter and increased 6% for the first nine
months of 1995 compared to 1994.
Gross profit margins on retail sales increased 3% for the three months
ended September 30, 1995 over the same period in 1994. Margins increased
slightly for the nine month period in 1995 over 1994. Inventory turns were
relatively constant for each of the periods.
EXPENSES
Operating expenses as a percentage of net revenues decreased to 61.4%
and 59.5% for the quarter and nine months, respectively, from 62.3% and 61.9%
for the same periods in 1994. Operating expenses increased 12% and 18% for the
three and nine months ended September 30, 1995, despite the 16% and 20%
increase in average stores in operation during the respective periods. This is
partially due to a reduction of approximately 3% and 1% in operating expenses
from comparable stores for the third quarter and nine months, respectively.
Administration expenses increased in the third quarter as a percentage
of net revenue to 12.3% from 11.3% in the comparable 1994 period. Total
administrative expenses for the quarter increased by 24%, due in part to
approximately $350,000 in one-time domestic expenses related to severance pay,
recruitment cost and relocation expenses for administrative personnel, as well
as the acquisition of Svensk Pantbelaning in the third quarter of 1994. For
the nine month period ended September 30, 1995, administrative expenses as a
percent of net revenues increased slightly from 11.4% to 11.6%. Total
administrative expenses increased approximately 25% for the nine month period,
due in part to the reasons mentioned above, along with increased expenses to
continue to build infrastructure and systems to support the increased store
base.
Depreciation and amortization as a percentage of net revenues
increased to 10.8% from 10.1% for the quarter and to 10.5% from 10%
Page 14
<PAGE> 17
for the nine months, primarily due to amortization of intangibles related to
the Swedish acquisition and depreciation increases of approximately 31% and 38%
in each of the two periods over the prior year. This increase in depreciation
was due to new store additions and computer point-of-sale hardware and
software, the installation of which was completed in the Company's domestic
stores in late 1994.
Net interest expense as a percentage of net revenues increased to 7.6%
in the quarter and 7.1% for the nine months of 1995 compared to 5.6% and 4.4%
for the same periods in 1994, due to an increase in total debt and higher
interest rates. Debt levels increased to support new store development and to
fund the acquisition of Svensk Pantbelaning. Weighted average interest rates
on domestic debt increased to 7.25% and 7.86% for the third quarter and nine
months of 1995 from 5.26% and 6.29% for both of the prior periods. The
borrowings of Swedish Kronor under a term loan bear interest at rates in effect
for Swedish currency which are currently higher than the U.S. average rates
noted above.
OTHER (INCOME)/EXPENSE
The other (income) expense figures for the third quarter and nine
months ended September 30, 1995 and 1994, represents the net effect of a
variety of items including operating losses from the Company's equity interest
in Mr. Payroll Corporation, rental income, gains and losses on disposition of
certain non-operating assets, and other miscellaneous items.
INCOME TAXES
The Company's effective tax rate increased to 41% for the third
quarter from 39% in 1994, and for the nine months of 1995 was 38% compared to
39% in the year ago period. The domestic effective tax rate increased to 49%
and 43% for the three and nine month periods of 1995 compared to 41% and 40%
for the 1994 periods, respectively, as a result of more income from states
which have a state income tax and other miscellaneous factors. Tax rates in
the Company's foreign operations were unchanged at 36% in the third quarter of
1995 versus 1994 and decreased to 33% for the nine months of 1995 from 36% in
the prior year as a result of lower tax rates for Svensk Pantbelaning and the
utilization of miscellaneous tax credits in the United Kingdom in the first
quarter of 1995.
LIQUIDITY AND CAPITAL RESOURCES
During the nine month ended September 30, 1995, the Company's capital
expenditures totaled $12.8 million. Capital investment included $1.4 million
for the acquisition of 3 pawnshops and $11.4 million for leasehold improvements
and equipment for start-up locations, additions to its computer systems, and
other fixed asset purchases.
Page 15
<PAGE> 18
The funding of these items has come from the Company's three-year,
$125 million revolving bank line of credit and from operating earnings. On May
3, 1995 the Company entered into an interest rate protection agreement for the
two years ending on May 5, 1997 that limits the interest rate on $20,000,000 of
debt. The Company's $30 million of Senior Notes, due May 1, 2003, to Teachers
Insurance and Annuity Association of America bear interest at 8.33% and are
payable in seven equal annual principal installments beginning May 1, 1997.
The Company entered into an interest rate swap in June of 1993 on $20 million
of these notes, which resulted in an effective floating interest rate,
currently at 9.14% on the debt.
On July 7, 1995 the Company issued $20,000,000 of "8.14% Senior
Notes", due July 7, 2007. Interest is payable on January 7 and July 7 of each
year. Mandatory annual payments of $4,000,000 commence on July 7, 2003.
Proceeds from the note issuance were applied to the debt outstanding under the
Company's line of credit.
On September 21, 1994, in conjunction with the acquisition of Svensk
Pantbelaning, the Company's wholly owned subsidiary, CAII Pantbelaning AB
(CAIIP), established a 193,750,000 Swedish Kronor ("SEK") term loan. The term
loan matures three years from the date of inception and there is no scheduled
amortization of the principal balance prior to maturity. Interest is payable
at Stockholm InterBank Offered Rate (STIBOR) plus 1%, currently at 10.07%. As
of September 30, 1995, SEK 193,750,000 (approximately $26,685,000) was
outstanding under the term loan. On June 2, 1995, CAIIP entered into a
floating-to-fixed interest rate exchange agreement. The agreement fixes the
interest rate on SEK 118,750,000 (approximately $17,154,000) at 10.94% through
August 17, 1998.
During the nine months ended September 30, 1995, the Company's
investments and advances to affiliates totaled $1.3 million. The Company as of
September 30, 1995, has unfunded commitments to advance affiliates $1,600,000.
Management believes that borrowings available under its $125 million
revolving bank line of credit facility and a L.5 million unused line of credit
available to Harvey & Thompson, Ltd. through a U.K. commercial bank, cash
generated from operations and current working capital of $168 million will be
sufficient to meet the Company's anticipated future capital requirements.
Page 16
<PAGE> 19
FOREIGN OPERATIONS
On the following page the table sets forth selected consolidated
financial data for Harvey & Thompson and Svensk Pantbelaning as of September
30, 1995, and 1994 and for the quarterly and nine month periods then ended.
Acquired on September 22, 1994, Svensk Pantbelaning operates a ten store chain
of loan-only pawnshops in Sweden in a manner similar to the operations of
Harvey & Thompson in the U.K.
Balance sheet data for Harvey & Thompson has been translated from
pounds sterling into U.S. dollars using the end of the period currency exchange
rates of 1.5848 and 1.5775 at September 30, 1995 and 1994, respectively.
Income statement data has been translated at average exchange rates of 1.5833
and 1.5906 for the three month and nine month periods ending September 30,
1995, respectively, compared to 1.5508 and 1.5163 for the same periods in 1994.
Balance sheet data for Svensk Pantbelaning has been translated from
Swedish Kronor into U.S. dollars using the end of the period currency exchange
rate of 6.9226 and 7.4783 at September 30, 1995 and 1994 respectively. Income
statement data has been translated at average exchange rates of 7.1805 and
7.2752 for the three month and nine month periods ending September 30, 1995,
respectively, compared to 7.5210 for the comparable periods in 1994.
Page 17
<PAGE> 20
FOREIGN OPERATIONS - CONTINUED
<TABLE>
<CAPTION>
Three Months Ended September 30,
Pro Forma
1995 1994 Change
---------- ---------- ------------
($ in thousands)
<S> <C> <C> <C>
Income Statement Data:
Net revenues $4,852 $3,196 52%
Operating expenses 2,627 1,492 76%
Income from operations 2,225 1,704 31%
Other Data:
Total average locations 44 31 42%
Gross profit margin 29.4% 36.4% (19)%
Average annualized inventory turns 3.2X 2.4X 33%
Ending loan balance $34,834 $30,562 14%
Average loan balance
per average location in operation $779 $584 33%
Expenses as a percentage of net revenues:
Operations 36.5% 32.1% 14%
Administration 12.8% 9.3% 38%
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended September 30,
Pro Forma
1995 1994 Change
---------- ---------- ------------
Income Statement Data: ($ in thousands)
<S> <C> <C> <C>
Net revenues $14,432 $7,964 81%
Operating expenses 7,397 3,791 95%
Income from operations 7,035 4,173 69%
Other Data:
Total average locations 43 30 43%
Gross profit margin 40.5% 38.2% 6%
Average annualized inventory turns 3.3X 2.9X 14%
Average loan balance
per average location in operation $769 $493 56%
Expenses as a percentage of net revenues
Operations 34.2% 32.5% 5%
Administration 12.3% 9.8% 26%
</TABLE>
Page 18
<PAGE> 21
DOMESTIC OPERATIONS
Presented below is selected financial data for the Company's domestic
operations as of September 30, 1995 and 1994 and for the three months then
ended:
<TABLE>
<CAPTION>
($ in thousands)
Pro Forma
1995 1994 Change
-------- -------- --------
<S> <C> <C>
Pawn service charges $15,342 $14,498 6%
Gross profit from sales
Sales 37,231 33,945 10%
Cost of sales 21,538 20,111 7%
-------- -------- --------
Gross profit 15,693 13,834 13%
-------- -------- --------
Net Revenues 31,035 28,332 10%
-------- -------- --------
Other Data:
Gross profit as a percentage of sales 42.2% 40.8% 3%
Average annualized inventory turnover 1.5X 1.5X 0%
Annualized yield on loans 123% 120% 3%
Average inventory balance per
average location in operation $178 $183 (3)%
Average loan balance per
average location in operation $152 $168 (10)%
Average pawn loan at end of
period (whole dollars) $69 $68 1%
Expenses as a percentage of net revenues:
Operations 65.3% 65.7% (1)%
Administration 12.2% 11.5% 6%
Depreciation and amortization 11.8% 10.6% 11%
Interest, net 6.8% 5.6% 21%
Domestic Locations in Operation:
Beginning of period 322 277
Acquired -- --
Established 3 17
Combined -- --
-------- --------
End of period 325 294 11%
======== ======== ========
Average number of locations in
operation during the period (a) 324 285 14%
======== ======== ========
</TABLE>
(a) Averages based on accumulation of month-end balances and dividing aggregate
total by total months in the period.
Page 19
<PAGE> 22
DOMESTIC OPERATIONS
Presented below is selected financial data for the Company's domestic
operations as of September 30, 1995 and 1994 and for the nine months then
ended:
<TABLE>
<CAPTION>
($ in thousands)
Pro Forma
1995 1994 Change
-------- -------- --------
<S> <C> <C>
Pawn service charges $44,163 $38,885 14%
Gross profit from sales
Sales 118,765 99,848 19%
Cost of sales 69,141 58,289 19%
-------- -------- --------
Gross profit 49,624 41,559 19%
Net Revenues 93,787 80,444 17%
-------- -------- --------
Other Data:
Gross profit as a percentage of sales 41.8% 41.6% 0%
Average annualized inventory turnover 1.6X 1.7X (6)%
Annualized yield on loans 124% 122% 2%
Average inventory balance per
average location in operation $182 $174 5%
Average loan balance per
average location in operation $151 $157 (4)%
Average pawn loan at end of
period (whole dollars) $69 $68 1%
Expenses as a percentage of net revenues:
Operations 63.3% 64.8% (2)%
Administration 11.5% 11.6% (1)%
Depreciation and amortization 11.4% 10.5% 9%
Interest, net 6.5% 4.7% 38%
Domestic Locations in Operation:
Beginning of period 300 251
Acquired 3 11
Established 24 35
Combined (2) (3)
-------- -------- --------
End of period 325 294 11%
======== ======== ========
Average number of locations in
operation during the period (a) 316 270 17%
======== ======== ========
</TABLE>
(a) Averages based on accumulation of month-end balances and dividing aggregate
total by total months in the period.
Page 20
<PAGE> 23
PART II
Item 1. LEGAL PROCEEDINGS
See Note 6 of Notes to Consolidated Financial Statements
Item 2. CHANGES IN SECURITIES
Not Applicable
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable
Item 5. OTHER INFORMATION
On October 25, 1995 the Company announced it has delivered
certain nonpublic information, under a confidentiality
agreement, regarding its business to an investment firm
pursuant to an unsolicited request and has held discussions
with its representatives concerning the information sent.
The purpose of the disclosure of the information is to enable
the firm to evaluate the Company as a possible acquisition
candidate in a transaction involving present company
management. There is no assurance that an offer will be
forthcoming or, if received, that it will be acceptable to
the Company.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.1 Second Supplement (May 12, 1995), Third Supplement
(July 7, 1995), and Fourth Supplement (November 10,
1995) to Note Agreement between the Company and
Teachers Insurance and Annuity Association of America
dated as of May 6, 1993.
10.2 First Supplement to Note Agreement between the
Company and Teachers Insurance and Annuity
Association of America dated as of July 7, 1995.
10.3 Fourth Amendment (June 7, 1995) and Fifth Amendment
(November 13, 1995) to Senior Revolving Credit
Facility Agreement among the Company and the various
Banks named therein dated June 29, 1993.
18 Letter from Coopers & Lybrand L.L.P. regarding change
in accounting principle.
27 Financial Data Schedule
(b) Reports on Form 8-K - None
Page 21
<PAGE> 24
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CASH AMERICA INTERNATIONAL, INC.
----------------------------------
(Registrant)
BY: /S/ Daniel R. Feehan
--------------------------------
Daniel R. Feehan
President and
Principal Financial Officer
Date: November 13, 1995
Page 22
<PAGE> 25
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
10.1 Second Supplement (May 12, 1995), Third Supplement
(July 7, 1995), and Fourth Supplement (November 10,
1995) to Note Agreement between the Company and
Teachers Insurance and Annuity Association of America
dated as of May 6, 1993.
10.2 First Supplement to Note Agreement between the
Company and Teachers Insurance and Annuity
Association of America dated as of July 7, 1995.
10.3 Fourth Amendment (June 7, 1995) and Fifth Amendment
(November 13, 1995) to Senior Revolving Credit
Facility Agreement among the Company and the various
Banks named therein dated June 29, 1993.
18 Letter from Coopers & Lybrand L.L.P. regarding change
in accounting principle.
27 Financial Data Schedule
<PAGE> 1
EXHIBIT 10.1
SECOND SUPPLEMENT TO NOTE AGREEMENT
This Second Supplement to Note Agreement (the "Second Supplement") is made
and entered into as of the 12th day of May, 1995, by and between Cash America
International, Inc. (the "Company") and Teachers Insurance and Annuity
Association of America ("Teachers").
RECITALS
WHEREAS, the parties hereto have entered into a Note Agreement dated as of
May 6, 1993, pursuant to which the Company issued and Teachers purchased
$30,000,000 aggregate principal amount of the Company's 8.33% Senior Notes Due
May 1, 2003, and the parties have amended said Note Agreement by entering into
a First Supplement to Note Agreement dated as of September 20, 1994 (said Note
Agreement, as amended, being referred to hereafter as the "Note Agreement");
and
WHEREAS, the Company and Teachers desire to amend certain provisions of
the Note Agreement.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Teachers hereby agree as follows:
1. Amendment to Section 9.01 of the Note Agreement. Section 9.01 of the
Note Agreement is hereby amended to read in its entirety as follows:
SECTION 9.01 Consolidated Indebtedness for Money
Borrowed. The Company will not permit Consolidated Indebtedness
for Money Borrowed, as of the last day of any Fiscal Quarter
commencing on or after January 1, 1993, to be greater than the
amount determined by multiplying the Applicable Percentage for
such date times the sum of (a) Consolidated Indebtedness for
Money Borrowed as of such date and (b) Consolidated Tangible Net
Worth as of such date. As used in this Section 9.01, "Applicable
Percentage" means (i) for any date prior to July 1, 1994, 47.5%,
(ii) for any date from July 1, 1994 up to and including June 30,
1995, 55%, and (iii) for any date after June 30, 1995, 50%.
2. Amendment to Section 9.05 of the Note Agreement. Section 9.05 of the
Note Agreement is hereby amended to read in its entirety as follows:
SECTION 9.05 Inventory Turnover. The Company will not
at any time permit the ratio of (a) cost of goods sold by the
Company and the Consolidated Subsidiaries for the Computation
Period (as shown on the consolidated statements of income
delivered by the Company pursuant to clause (a) or (b) of Section
8.01 with respect to the Computation Period) to (b) the Average
Monthly Inventory for the Computation Period to be less than (i)
1.75 to 1 for any date on or prior to June 30, 1994, (ii) 1.65 to
1 for any date after June 30, 1994 up to and including June 30,
<PAGE> 2
1995, and (iii) 1.75 to 1 for any date after June 30, 1995. As
used in this Section 9.05, (I) "Computation Period" means, at any
time, the 12-month period ended on the date of the most recent
balance sheet delivered (or required to be delivered) by the
Company pursuant to clause (a) or (b) of Section 8.01 and (ii)
"Average Monthly Inventory" means, when used with reference to
any Computation Period, the amount determined by dividing (A) the
aggregate amounts of inventory appearing on the books of the
Company and the Consolidated Subsidiaries as of the last day of
each calendar month within such Computation Period by (B) twelve.
3. Amendment to Section 9.06 of the Note Agreement. Section 9.06 of the
Note Agreement is hereby amended to read in its entirety as follows:
SECTION 9.06 Fixed Charge Coverage. The Company will
not at any time permit the ratio of (a) the sum of Consolidated
Adjusted Net Income for the Computation Period plus the aggregate
amount of all taxes, rents, leases and interest expenses deducted
from gross income to obtain such Consolidated Adjusted Net Income
to (b) the aggregate amount of all such rents, leases and
interest expenses so deducted to be less than (i) 2.25 to 1 if
the Computation Period ends on or before December 31, 1994, (ii)
1.85 to 1 if the Computation Period ends after December 31, 1994
but on or before June 30, 1995, and (iii) 2.5 to 1 if the
Computation Period ends after June 30, 1995. As used in this
Section 9.06, "Computation Period" means, at any time, the four
consecutive Fiscal Quarters covered by the four most recent
income statements delivered (or required to be delivered) by the
Company pursuant to Section 8.01(a).
4. Definitions. All capitalized terms used herein and not otherwise
specifically defined shall have the respective meanings set forth in the Note
Agreement.
5. Ratification of Note Agreement. Except as specified hereinabove, all
other terms of the Note Agreement shall remain unchanged and are hereby
ratified and confirmed. All references to "this Agreement" or "the Agreement"
appearing in the Note Agreement, and all reference to the Note Agreement
appearing in any other instrument or document, shall be deemed to refer to the
Note Agreement as supplemented and amended by this Second Amendment.
6. Counterparts. This Second Supplement may be executed in any number of
counterparts and by the parties hereto on separate counterparts, each of which
when so executed and delivered shall be an original, but all the counterparts
shall together constitute one and the same instrument.
2
<PAGE> 3
IN WITNESS WHEREOF, the undersigned have executed this Second Supplement
to Note Agreement as of the date first written above.
CASH AMERICA INTERNATIONAL, INC.
By: /s/ THOMAS A. BESSANT, JR.
--------------------------------------
Thomas A. Bessant, Jr., Vice President
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By: /s/ NANCY F. HELLER
--------------------------------------
Nancy F. Heller, Director
Private Placements
3
<PAGE> 4
THIRD SUPPLEMENT TO NOTE AGREEMENT
This Third Supplement to Note Agreement (the "Third Supplement") is made
and entered into as of the 7th day of July, 1995, by and between CASH AMERICA
INTERNATIONAL, INC., a Texas corporation (the "Company"), and TEACHERS
INSURANCE AND ANNUITY ASSOCIATION OF AMERICA ("Teachers").
R E C I T A L S
WHEREAS, the parties hereto have entered into a Note Agreement, dated as
of May 6, 1993, pursuant to which the Company issued and Teachers purchased
$30,000,000 aggregate principal amount of the Company's 8.33% Senior Notes Due
May 1, 2003 (as supplemented by the First Supplement dated as of September 20,
1994 and the Second Supplement dated as of May 12, 1995, the "1993 Note
Agreement");
WHEREAS, the Company intends to enter into a Note Agreement (the "1995
Note Agreement") with Teachers, pursuant to which the Company will issue
$20,000,000 principal amount of its 8.14% Senior Notes due July 7, 2007 (the
"1995 Notes"), and the 1995 Notes will be guaranteed by certain subsidiaries of
the Company (the "1995 Guaranty");
WHEREAS, in connection with entering into the 1995 Note Agreement, the
Company and Teachers desire to amend certain provisions of the 1993 Note
Agreement.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Teachers hereby agree as follows:
1. Amendment to Section 2.01 of the 1993 Note Agreement. (a) Section
2.01 of the 1993 Note Agreement is hereby amended to revise and amend the
following defined terms used in the 1993 Note Agreement:
"Bank Loan Agreement" means the Senior Revolving Credit Facility
Agreement dated as of June 29, 1993, among the Company, the banks
party thereto and NationsBank of Texas, N.A., as Agent, as amended by
(i) the First Amendment to Senior Revolving Credit Facility Agreement
dated as of June 7, 1994; (ii) the Second Amendment to Senior
Revolving Credit Agreement dated as of September 21, 1994; (iii) the
Third Amendment to Senior Revolving Credit Agreement dated as of March
10, 1995; and (iv) the Fourth Amendment to Senior Revolving Credit
Agreement dated as of June 7, 1995.
"Loan Documents" means, collectively, this Agreement, the Notes,
the Guaranty, the Subrogation and Contribution Agreement and other
instruments and documents executed and delivered to the Purchaser by
the Loan Parties, or any of them, pursuant to this Agreement.
<PAGE> 5
"1995 Guaranty" means that certain Joint and Several Guaranty
dated as of July 7, 1995 delivered by the Company and certain of its
Subsidiaries in connection with the issuance of the 1995 Notes.
"1995 Note Agreement" means that certain Note Agreement dated as
of July 7, 1995 between the Company and Teachers Insurance and Annuity
Association of America.
"1995 Notes" means those certain 8.14% Senior Notes due July 7,
2007 issued by the Company under and pursuant to the 1995 Note
Agreement.
"Subrogation and Contribution Agreement" means that certain
Subrogation and Contribution Agreement dated as of July 7, 1995
delivered by the Company and certain of its Subsidiaries in connection
with the Notes.
"Pantbelaning Indebtedness" means indebtedness of Pantbelaning
for borrowed money in the amount of SEK 193,750,000 pursuant to that
certain Loan Agreement, dated as of September 21, 1994, among
Pantbelaning, the Lenders who are a party thereto, and NationsBank of
Texas, N.A., as Administrative Lender, as the same may be renewed,
extended and modified from time to time.
"Thomas Hjelm" means Murtrum AB, formerly known as Thomas Hjelm
AB, a corporation organized under the laws of Sweden and a
Wholly-Owned Subsidiary.
"Thomas Hjelm Affiliates" means the following corporations, each
of which (i) is organized under the laws of Sweden and (ii) is a
Wholly-Owned Subsidiary: Pantintressenter i Stockholm AB; AB Svensk
Pantbelaning; and Svenska Aktionsgruppen AB.
The definition of "Temporary Cash Investment" contained in Section 2.01 of
the 1993 Note Agreement is amended to add thereto a new clause (g), to follow
clause (f), to read as follows:
"and (g) in the case of Pantbelaning, Thomas Hjelm and the Thomas
Hjelm Affiliates, certificates of deposit and other instruments
substantially equivalent to a certificate of deposit maturing within
180 days from the date of acquisition and issued by a bank or trust
company organized and located in Sweden having capital, surplus and
undivided profits of at least SEK 750,000,000."
2. Amendment to Section 9.01 of the 1993 Note Agreement. Section 9.01 of
the 1993 Note Agreement is hereby amended to read in its entirety as follows:
2
<PAGE> 6
SECTION 9.01. Consolidated Indebtedness for Money Borrowed. The
Company will not permit Consolidated Indebtedness for Money Borrowed,
as of the last day of any Fiscal Quarter commencing on or after
January 1, 1995, to be greater than the amount determined by
multiplying the Applicable Percentage for such date times the sum of
(a) Consolidated Indebtedness for Money Borrowed as of such date and
(b) Consolidated Tangible Net Worth as of such date. As used in this
Section 9.01, "Applicable Percentage" means the following:
For the Fiscal Quarter Ending On Applicable Percentage
-------------------------------- ---------------------
March 31, 1995 through September 30, 1997 57.5%
December 31, 1997 55%
March 31, 1998 through September 30, 1998 57.5%
December 31, 1998 55%
March 31, 1999 through September 30, 1999 55%
December 31, 1999 52.5%
March 31, 2000 through September 30, 2000 55%
December 31, 2000 52.5%
March 31, 2001 through September 30, 2001 55%
December 31, 2001 52.5%
March 31, 2002 through September 30, 2002 55%
December 31, 2002 52.5%
March 31, 2003 and thereafter 55%
3. Amendment to Section 9.05 of the 1993 Note Agreement. Section 9.05 of
the 1993 Note Agreement is hereby amended to read in its entirety as follows:
SECTION 9.05. Inventory Turnover. The Company will not at any
time permit the ratio of (a) cost of goods sold by the Company and the
Consolidated Subsidiaries for the Computation Period (as shown on the
consolidated statements of income delivered by the Company pursuant to
clause (a) or (b) of Section 8.01 with respect to the Computation
Period) to (b) the Average Monthly Inventory for the Computation
Period to be less than 1.65 to 1. As used in this Section 9.05, (i)
"Computation Period" means, at any time, the 12-month period ended on
the date of the most recent balance sheet delivered (or required to be
delivered) by the Company pursuant to clause (a) or (b) of Section
8.01 and (ii) "Average Monthly Inventory" means, when used with
reference to any Computation Period, the amount determined by dividing
(A) the aggregate amounts of inventory appearing on the books of the
Company and the Consolidated Subsidiaries as of the last day of each
calendar month within such Computation Period by (B) twelve.
4. Amendment to Section 9.06 of the 1993 Note Agreement. Section 9.06 of
the 1993 Note Agreement is hereby amended in its entirety to read as follows:
3
<PAGE> 7
SECTION 9.06. Fixed Charge Coverage. The Company will not at
any time permit the ratio of (a) the sum of Consolidated Adjusted Net
Income for the Computation Period plus the aggregate amount of all
taxes, rents, leases and interest expenses deducted from gross income
to obtain such Consolidated Adjusted Net Income to (b) the aggregate
amount of all such rents, leases and interest expenses so deducted to
be less than (i) 1.8 to 1 if the Computation Period ends on or before
December 31, 1995, (ii) 1.85 to 1 if the Computation Period ends after
December 31, 1995 but on or before December 31, 1996, and (iii) 1.9 to
1 if the Computation Period ends after December 31, 1996. As used in
this Section 9.06, "Computation Period" means, at any time, the period
of four consecutive Fiscal Quarters ended on the date of the most
recent balance sheet delivered (or required to be delivered) by the
Company pursuant to clause (a) or (b) of Section 8.01.
5. Amendment to Section 9.08(a) of the 1993 Note Agreement. Clause (1)
of Section 9.08(a) of the 1993 Note Agreement is hereby amended in its entirety
to read as follows:
(1)(A) indebtedness of the Company arising out of this Agreement
and the other Loan Documents, and (B) indebtedness of the Company
arising out of the 1995 Note Agreement, the 1995 Note, the 1995
Guaranty and the other Loan Documents as defined in the 1995 Note
Agreement;
6. Amendment to Section 9.08(b)(1) of the 1993 Note Agreement. Clause
(1) of Section 9.08(b) of the 1993 Note Agreement is hereby amended in its
entirety to read as follows:
(1)(A) indebtedness of Subsidiaries arising out of this
Agreement and the other Loan Documents, and (B) indebtedness of
Subsidiaries arising out of the 1995 Guaranty;
7. Amendment to Section 9.08(b)(10) of the 1993 Note Agreement. Clause
(10) of Section 9.08(b) of the 1993 Note Agreement is hereby amended to read in
its entirety as follows:
(10)(A) in the case of Pantbelaning, the Pantbelaning
Indebtedness, (B) in the case of Pantbelaning, Thomas Hjelm, and the
Thomas Hjelm Affiliates, indebtedness for money borrowed (not to
exceed SEK 55,000,000 in the aggregate at any time outstanding)
incurred after the date hereof pursuant to a credit facility to be
extended by one or more banks, but only if no Default shall be in
existence at the time of the incurrence of such indebtedness, and (C)
in the case of Harvey & Thompson Limited, indebtedness for money
borrowed (not to exceed 5,000,000 pounds sterling in the aggregate at
any time outstanding) incurred under and pursuant to that certain loan
letter agreement between Harvey & Thompson Limited and Barclays Bank
PLC dated August 26, 1993, as renewed and extended by that certain
letter agreement between such parties dated February 10, 1995;
provided that the indebtedness for money borrowed described in clauses
(A), (B) and (C) described above may be extended, renewed or
refinanced so long as there
4
<PAGE> 8
is no increase in principal amount of such indebtedness for money
borrowed and so long as no Default shall be in existence or shall
occur upon such extension, renewal or refinancing.
8. Amendment to Section 9.08(b)(13) of the 1993 Note Agreement. Section
9.08(b)(13) of the 1993 Note Agreement is hereby amended to delete and remove
in its entirety clause (13) thereof.
9. Amendment to Section 9.20(a)(1)(D) of the 1993 Note Agreement.
Section 9.20(a)(1)(D) of the 1993 Note Agreement is amended in its entirety to
read as follows:
"(D) promptly (and in any event within 15 days) after the
consummation of such acquisition, such Person shall duly
authorize, execute and deliver to each Holder an instrument in
writing pursuant to which such Person agrees to become a
Guarantor under, and to be bound as a Guarantor by the terms of,
the Guaranty and the Subrogation and Contribution Agreement; and"
10. Amendment to Section 9.20(a)(2)(B) of the 1993 Note Agreement.
Section 9.20(a)(2)(B) of the 1993 Note Agreement is amended in its entirety to
read as follows:
"(B) subject to paragraph (b) below, promptly (and in any
event within 15 days) after its creation or formation, the New
Entity shall duly authorize, execute and deliver to each Holder
an instrument in writing pursuant to which the New Entity agrees
to become a Guarantor under, and to be bound as a Guarantor by
the terms of, the Guaranty and the Subrogation and Contribution
Agreement;"
11. Addition of a new Section 9.23 to the 1993 Note Agreement. The 1993
Note Agreement is hereby amended to add thereto a new Section 9.23, which shall
read in its entirety as follows:
SECTION 9.23. Incorporation of More Restrictive Covenants. In
the event the Bank Loan Agreement or any renewal, modification or
replacement thereof at any time includes a financial covenant or
restriction similar to the covenants and restrictions set forth in
Section 9.01, 9.05 or 9.06 hereof that is more restrictive than the
levels set forth in said Section 9.01, 9.05 and 9.06 (the "More
Restrictive Covenant"), the Company shall, immediately upon such
inclusion of the More Restrictive Covenant, notify the Purchaser and
furnish a verbatim statement of the More Restrictive Covenant. Such
notification shall also inform the Purchaser of its right to elect in
writing to substitute the More Restrictive Covenant as described below
and shall state the date by which such election must be made in
accordance with this Section 9.23. The Purchaser may elect to
substitute the More Restrictive Covenant for the corresponding Section
9.01, 9.05 or 9.06 by notifying the Company in writing within sixty
(60) days after receipt of the notice referred to in the preceding
sentence.
5
<PAGE> 9
12. Amendment to Section 10.01(h) of the 1993 Note Agreement. Section
10.01(h) of the 1993 Note Agreement is amended in its entirety to read as
follows:
"(h) any Loan Party, Harvey & Thompson Limited, Pantbelaning,
Thomas Hjelm or any Thomas Hjelm Affiliate shall (i) default in any
payment of principal of or interest on any other indebtedness in
excess of $500,000 beyond any period of grace provided with respect
thereto or (ii) fail to perform or observe any other covenant or
agreement contained in any agreement under which any such indebtedness
is created or outstanding within any applicable grace period provided
therein (or if any other event thereunder or under any such agreement
shall occur and be continuing) and the effect of such failure or other
event is (A) to cause such indebtedness to become due prior to its
stated maturity or (B) to permit the holder or holders of such
indebtedness (or any Person acting on behalf of such holder or
holders) to cause such indebtedness to become due prior to its stated
maturity; or"
13. Definitions. All capitalized terms used herein and not otherwise
specifically defined shall have the respective meanings set forth in the Note
Agreement.
14. Ratification of the 1993 Note Agreement. Except as specified
hereinabove, all other terms of the 1993 Note Agreement shall remain unchanged
and are hereby ratified and confirmed. All references to "this Agreement" or
"the Agreement" appearing in the 1993 Note Agreement, and all references to the
1993 Note Agreement appearing in any other instrument or document, shall be
deemed to refer to the 1993 Note Agreement as supplemented and amended by the
First Supplement, the Second Supplement and this Third Supplement.
15. Counterparts. This Third Supplement may be executed in any number of
counterparts and by the parties hereto on separate counterparts, each of which
when so executed and delivered shall be an original, but all the counterparts
shall together constitute one and the same instrument.
6
<PAGE> 10
IN WITNESS WHEREOF, the undersigned have executed this Third Supplement to
Note Agreement as of the date first written above.
CASH AMERICA INTERNATIONAL, INC.
By: /s/ THOMAS A. BESSANT, JR.
--------------------------------------
Thomas A. Bessant, Jr., Vice President
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By: /s/ NANCY F. HELLER
--------------------------------------
Nancy F. Heller, Director
Private Placements
7
<PAGE> 11
FOURTH SUPPLEMENT TO 1993 NOTE AGREEMENT
This Fourth Supplement to 1993 Note Agreement (the "Fourth Supplement") is
made and entered into as of the 10th day of November, 1995, by and between Cash
America International, Inc. (the "Company") and Teachers Insurance and Annuity
Association of America ("Teachers").
RECITALS
WHEREAS, the parties hereto have entered into a Note Agreement dated as of
May 6, 1993, pursuant to which the Company issued and Teachers purchased
$30,000,000 aggregate principal amount of the Company's 8.33% Senior Notes Due
May 1, 2003, and the parties have amended said Note Agreement by entering into
a First Supplement to Note Agreement dated as of September 20, 1994, a Second
Supplement to Note Agreement dated as of May 12, 1995, and a Third Supplement
to Note Agreement dated as of July 7, 1995 (said Note Agreement, as amended,
being referred to hereafter as the "Note Agreement"); and
WHEREAS, the Company and Teachers desire to provide for Teachers' consent
to a change in accounting method by the Company and to amend certain provisions
of the Note Agreement.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Teachers hereby agree as follows:
1. Consent to Change in Accounting Method. The Company has informed
Teachers that the Company proposes to change its method of income recognition
on pawn loans, with the change to be effective as of January 1, 1995. Under
the new method, the Company accrues pawn service charges on a constant yield
basis over the loan term for those loans with respect to which the Company
deems collection to be probable. (The determination of probability of
collection is based on historical statistics for loan redemptions.) For loans
not repaid, the carrying value of the forfeited collateral (inventory) is the
lower of cost (the principal amount advanced) or market. Under the old method,
pawn service charges were accrued on all loans on a constant yield basis over
the loan term. If a loan was not repaid, the principal amount advanced plus
accrued pawn service charges became the carrying value of the forfeited
collateral. Teachers hereby consents to the Company's change in its method of
income recognition as described above, and, to the extent that such change
would otherwise constitute a violation of Section 9.17 of the Note Agreement,
Teachers hereby irrevocably and permanently waives any such violation and
agrees that such change shall in no event constitute a Default or Event of
Default at any time.
<PAGE> 12
2. Amendment to Section 9.02 of the Note Agreement. Section 9.02 of the
Note Agreement is hereby amended to read in its entirety as follows:
SECTION 9.02. Consolidated Tangible Net Worth. The Company will
not permit Consolidated Tangible Net Worth at any time to be less than
the sum of (a) $71,000,000 plus (b) 50% of Consolidated Adjusted Net
Income (but only if positive) for each Fiscal Quarter ending after
December 31, 1992.
3. Amendment to Section 9.04 of the Note Agreement. Section 9.04 of the
Note Agreement is hereby amended to read in its entirety as follows:
SECTION 9.04. Current Assets to Total Indebtedness Ratio. The
Company will not permit the ratio of (a) Consolidated Current Assets
to (b) Consolidated Current Liabilities plus Consolidated Funded Debt
to be less than (i) 1.25 to 1 as of the last day of any Fiscal Quarter
commencing on or after January 1, 1993 and ending on or before
December 31 1994, or (ii) 1.10 to 1 as of the last day of any Fiscal
Quarter commencing on or after January 1, 1995. As used in this
Section 9.04, "Consolidated Funded Debt" means, at any time,
Consolidated Indebtedness for Money Borrowed at such time, provided
that in no event shall Consolidated Funded Debt include any obligation
included in Consolidated Current Liabilities.
4. Amendment to Section 9.06 of the Note Agreement. Section 9.06 of the
Note Agreement is hereby amended to read in its entirety as follows:
SECTION 9.06. Fixed Charge Coverage. The Company will not at
any time permit the ratio of (a) the sum of Consolidated Adjusted Net
Income for the Computation Period plus the aggregate amount of all
taxes, rents, leases and interest expenses deducted from gross income
to obtain such Consolidated Adjusted Net Income to (b) the aggregate
amount of all such taxes, rents, leases and interest expenses so
deducted to be less than (i) 1.8 to 1 if the Computation Period ends
on or before December 31, 1995, (ii) 1.85 to 1 if the Computation
Period ends after December 31, 1995 but on or before December 31,
1996, and (iii) 1.9 to 1 if the Computation Period ends after December
31, 1996. As used in this Section 9.06, "Computation Period" means,
at any time, the period of four consecutive Fiscal Quarters ended on
the date of the most recent balance sheet delivered (or required to be
delivered) by the Company pursuant to clause (a) or (b) of Section
8.01. For purposes of this Section 9.06, the charge of $19,772,000
against the Company's First Quarter 1995 earnings for the cumulative
effect (through December 31, 1994) of the change in its accounting
method shall be excluded from the computation of Consolidated Adjusted
Net Income.
2
<PAGE> 13
5. Amendment to Section 9.07 of the Note Agreement. Paragraph (a) of
Section 9.07 of the Note Agreement is hereby amended to read in its entirety as
follows:
(a) The Company will not, and will not permit any Subsidiary to,
(i) declare or make any dividends or distributions on any of its Stock
(other than dividends payable in shares of its Stock), (ii) purchase,
redeem or acquire for value any of the Company's or any Subsidiary's
Stock, (iii) make any principal payment on (or make any payment,
transfer or deposit for the purpose of canceling, extinguishing,
satisfying or defeasing) any indebtedness of the Company which is
subordinate in right of payment to the Notes or any other Obligation,
(iv) set aside funds for any such purposes or (v) become liable to do
any of the foregoing (in each case, a "Restricted Payment") unless,
immediately after giving effect thereto, (A) no Default shall exist
and (B) the aggregate amount of all Restricted Payments made by the
Company and all Subsidiaries since May 1, 1993 does not exceed 20% of
Consolidated Adjusted Net Income for the period commencing on January
1, 1992. For purposes of this Section 9.07, the charge of $19,772,000
against the Company's First Quarter 1995 earnings for the cumulative
effect (through December 31, 1994) of the change in its accounting
method shall be excluded from the computation of Consolidated Adjusted
Net Income.
6. Definitions. All capitalized terms used herein and not otherwise
specifically defined shall have the respective meanings set forth in the Note
Agreement.
7. Ratification of Note Agreement. Except as specified hereinabove, all
other terms of the Note Agreement shall remain unchanged and are hereby
ratified and confirmed. All references to "this Agreement" or "the Agreement"
appearing in the Note Agreement, and all reference to the Note Agreement
appearing in any other instrument or document, shall be deemed to refer to the
Note Agreement as supplemented and amended by this Fourth Supplement.
8. Counterparts. This Fourth Supplement may be executed in any number
of counterparts and by the parties hereto on separate counterparts, each of
which when so executed and delivered shall be an original, but all the
counterparts shall together constitute one and the same instrument.
By signing below where indicated, the undersigned, CASH AMERICA, INC. OF
SOUTH CAROLINA, FLORIDA CASH AMERICA, INC., GEORGIA CASH AMERICA, INC., CASH
AMERICA, INC. OF LOUISIANA, CASH AMERICA, INC. OF NORTH CAROLINA, CASH AMERICA,
INC. OF TENNESSEE, CASH AMERICA, INC. OF OKLAHOMA, CASH AMERICA, INC. OF
KENTUCKY, CASH AMERICA PAWN, INC. OF OHIO, CASH AMERICA MANAGEMENT L.P., CASH
AMERICA PAWN L.P., CASH AMERICA HOLDING, INC., EXPRESS CASH INTERNATIONAL
CORPORATION, CASH AMERICA, INC. OF ALABAMA, CASH AMERICA, INC. OF COLORADO,
CASH AMERICA, INC. OF INDIANA, CASH AMERICA, INC., CASH AMERICA OF MISSOURI,
INC., and VINCENT'S JEWELERS AND LOAN, INC., as Guarantors, do each acknowledge
and approve the Note Agreement, as amended by this Fourth Supplement, and the
other Loan Documents, and the terms thereof, and specifically agree to comply
with all provisions therein and herein which refer to or affect such
Guarantors.
3
<PAGE> 14
IN WITNESS WHEREOF, the undersigned have executed this Fourth Supplement
to 1993 Note Agreement as of the date first written above.
CASH AMERICA INTERNATIONAL, INC.
By: /s/ Thomas A. Bessant, Jr.
--------------------------------------
Thomas A. Bessant, Jr., Vice President
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By: /s/ Nancy F. Heller
--------------------------------------
Nancy F. Heller, Director
Private Placements
4
<PAGE> 15
GUARANTORS
CASH AMERICA, INC. OF SOUTH CAROLINA
FLORIDA CASH AMERICA, INC.
GEORGIA CASH AMERICA, INC.
CASH AMERICA, INC. OF LOUISIANA
CASH AMERICA, INC. OF NORTH CAROLINA
CASH AMERICA, INC. OF TENNESSEE
CASH AMERICA, INC. OF OKLAHOMA
CASH AMERICA, INC. OF KENTUCKY
CASH AMERICA PAWN, INC. OF OHIO
CASH AMERICA MANAGEMENT L.P., a Delaware limited partnership, by its
general partner, Cash America Holding, Inc.
CASH AMERICA PAWN L.P., a Delaware limited partnership, by its general
partner, Cash America Holding, Inc.
CASH AMERICA HOLDING, INC.
EXPRESS CASH INTERNATIONAL CORPORATION
CASH AMERICA, INC. OF ALABAMA
CASH AMERICA, INC. OF COLORADO
CASH AMERICA, INC. OF INDIANA
CASH AMERICA, INC.
CASH AMERICA OF MISSOURI, INC.
VINCENT'S JEWELERS AND LOAN, INC.
By: /s/ Thomas A. Bessant, Jr.
----------------------------------------------
Thomas A. Bessant, Jr., Vice President for All
5
<PAGE> 1
EXHIBIT 10.2
FIRST SUPPLEMENT TO 1995 NOTE AGREEMENT
This First Supplement to 1995 Note Agreement (the "First Supplement") is
made and entered into as of the 10th day of November, 1995, by and between Cash
America International, Inc. (the "Company") and Teachers Insurance and Annuity
Association of America ("Teachers").
RECITALS
WHEREAS, the parties hereto have entered into a Note Agreement dated as of
July 7, 1995, pursuant to which the Company issued and Teachers purchased
$20,000,000 aggregate principal amount of the Company's 8.14% Senior Notes Due
July 7, 2007 (said Note Agreement being referred to hereafter as the "Note
Agreement"); and
WHEREAS, the Company and Teachers desire to provide for Teachers' consent
to a change in accounting method by the Company and to amend certain provisions
of the Note Agreement.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Teachers hereby agree as follows:
1. Consent to Change in Accounting Method. The Company has informed
Teachers that the Company proposes to change its method of income recognition
on pawn loans, with the change to be effective as of January 1, 1995. Under
the new method, the Company accrues pawn service charges on a constant yield
basis over the loan term for those loans with respect to which the Company
deems collection to be probable. (The determination of probability of
collection is based on historical statistics for loan redemptions.) For loans
not repaid, the carrying value of the forfeited collateral (inventory) is the
lower of cost (the principal amount advanced) or market. Under the old method,
pawn service charges were accrued on all loans on a constant yield basis over
the loan term. If a loan was not repaid, the principal amount advanced plus
accrued pawn service charges became the carrying value of the forfeited
collateral. Teachers hereby consents to the Company's change in its method of
income recognition as described above, and, to the extent that such change
would otherwise constitute a violation of Section 9.17 of the Note Agreement,
Teachers hereby irrevocably and permanently waives any such violation and
agrees that such change shall in no event constitute a Default or Event of
Default at any time.
<PAGE> 2
2. Amendment to Section 9.02 of the Note Agreement. Section 9.02 of the
Note Agreement is hereby amended to read in its entirety as follows:
SECTION 9.02. Consolidated Tangible Net Worth. The Company will
not permit Consolidated Tangible Net Worth at any time to be less than
the sum of (a) $71,000,000 plus (b) 50% of Consolidated Adjusted Net
Income (but only if positive) for each Fiscal Quarter ending after
December 31, 1992.
3. Amendment to Section 9.04 of the Note Agreement. Section 9.04 of the
Note Agreement is hereby amended to read in its entirety as follows:
SECTION 9.04. Current Assets to Total Indebtedness Ratio. The
Company will not permit the ratio of (a) Consolidated Current Assets
to (b) Consolidated Current Liabilities plus Consolidated Funded Debt
to be less than 1.10 to 1 as of the last day of any Fiscal Quarter
commencing on or after January 1, 1995. As used in this Section 9.04,
"Consolidated Funded Debt" means, at any time, Consolidated
Indebtedness for Money Borrowed at such time, provided that in no
event shall Consolidated Funded Debt include any obligation included
in Consolidated Current Liabilities.
4. Amendment to Section 9.06 of the Note Agreement. Section 9.06 of the
Note Agreement is hereby amended to read in its entirety as follows:
SECTION 9.06. Fixed Charge Coverage. The Company will not at
any time permit the ratio of (a) the sum of Consolidated Adjusted Net
Income for the Computation Period plus the aggregate amount of all
taxes, rents, leases and interest expenses deducted from gross income
to obtain such Consolidated Adjusted Net Income to (b) the aggregate
amount of all such taxes, rents, leases and interest expenses so
deducted to be less than (i) 1.8 to 1 if the Computation Period ends
on or before December 31, 1995, (ii) 1.85 to 1 if the Computation
Period ends after December 31, 1995 but on or before December 31,
1996, and (iii) 1.9 to 1 if the Computation Period ends after December
31, 1996. As used in this Section 9.06, "Computation Period" means,
at any time, the period of four consecutive Fiscal Quarters ended on
the date of the most recent balance sheet delivered (or required to be
delivered) by the Company pursuant to clause (a) or (b) of Section
8.01. For purposes of this Section 9.06, the charge of $19,772,000
against the Company's First Quarter 1995 earnings for the cumulative
effect (through December 31, 1994) of the change in its accounting
method shall be excluded from the computation of Consolidated Adjusted
Net Income.
2
<PAGE> 3
5. Amendment to Section 9.07 of the Note Agreement. Paragraph (a) of
Section 9.07 of the Note Agreement is hereby amended to read in its entirety as
follows:
(a) The Company will not, and will not permit any Subsidiary to,
(i) declare or make any dividends or distributions on any of its Stock
(other than dividends payable in shares of its Stock), (ii) purchase,
redeem or acquire for value any of the Company's or any Subsidiary's
Stock, (iii) make any principal payment on (or make any payment,
transfer or deposit for the purpose of canceling, extinguishing,
satisfying or defeasing) any indebtedness of the Company which is
subordinate in right of payment to the Notes or any other Obligation,
(iv) set aside funds for any such purposes or (v) become liable to do
any of the foregoing (in each case, a "Restricted Payment") unless,
immediately after giving effect thereto, (A) no Default shall exist
and (B) the aggregate amount of all Restricted Payments made by the
Company and all Subsidiaries since May 1, 1993 does not exceed 20% of
Consolidated Adjusted Net Income for the period commencing on January
1, 1992. For purposes of this Section 9.07, the charge of $19,772,000
against the Company's First Quarter 1995 earnings for the cumulative
effect (through December 31, 1994) of the change in its accounting
method shall be excluded from the computation of Consolidated Adjusted
Net Income.
6. Definitions. All capitalized terms used herein and not otherwise
specifically defined shall have the respective meanings set forth in the Note
Agreement.
7. Ratification of Note Agreement. Except as specified hereinabove, all
other terms of the Note Agreement shall remain unchanged and are hereby
ratified and confirmed. All references to "this Agreement" or "the Agreement"
appearing in the Note Agreement, and all reference to the Note Agreement
appearing in any other instrument or document, shall be deemed to refer to the
Note Agreement as supplemented and amended by this First Supplement.
8. Counterparts. This First Supplement may be executed in any number of
counterparts and by the parties hereto on separate counterparts, each of which
when so executed and delivered shall be an original, but all the counterparts
shall together constitute one and the same instrument.
By signing below where indicated, the undersigned, CASH AMERICA, INC. OF
SOUTH CAROLINA, FLORIDA CASH AMERICA, INC., GEORGIA CASH AMERICA, INC., CASH
AMERICA, INC. OF LOUISIANA, CASH AMERICA, INC. OF NORTH CAROLINA, CASH AMERICA,
INC. OF TENNESSEE, CASH AMERICA, INC. OF OKLAHOMA, CASH AMERICA, INC. OF
KENTUCKY, CASH AMERICA PAWN, INC. OF OHIO, CASH AMERICA MANAGEMENT L.P., CASH
AMERICA PAWN L.P., CASH AMERICA HOLDING, INC., EXPRESS CASH INTERNATIONAL
CORPORATION, CASH AMERICA, INC. OF ALABAMA, CASH AMERICA, INC. OF COLORADO,
CASH AMERICA, INC. OF INDIANA, CASH AMERICA, INC., CASH AMERICA OF MISSOURI,
INC., and VINCENT'S JEWELERS AND LOAN, INC., as Guarantors, do each acknowledge
and approve the Note Agreement, as amended by this First Supplement, and the
other Loan Documents, and the terms thereof, and specifically agree to comply
with all provisions therein and herein which refer to or affect such
Guarantors.
3
<PAGE> 4
IN WITNESS WHEREOF, the undersigned have executed this First Supplement to
1995 Note Agreement as of the date first written above.
CASH AMERICA INTERNATIONAL, INC.
By: /s/ Thomas A. Bessant, Jr.
--------------------------------------
Thomas A. Bessant, Jr., Vice President
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By: /s/ Nancy F. Heller
--------------------------------------
Nancy F. Heller, Director
Private Placements
4
<PAGE> 5
GUARANTORS
CASH AMERICA, INC. OF SOUTH CAROLINA
FLORIDA CASH AMERICA, INC.
GEORGIA CASH AMERICA, INC.
CASH AMERICA, INC. OF LOUISIANA
CASH AMERICA, INC. OF NORTH CAROLINA
CASH AMERICA, INC. OF TENNESSEE
CASH AMERICA, INC. OF OKLAHOMA
CASH AMERICA, INC. OF KENTUCKY
CASH AMERICA PAWN, INC. OF OHIO
CASH AMERICA MANAGEMENT L.P., a Delaware limited partnership, by its
general partner, Cash America Holding, Inc.
CASH AMERICA PAWN L.P., a Delaware limited partnership, by its general
partner, Cash America Holding, Inc.
CASH AMERICA HOLDING, INC.
EXPRESS CASH INTERNATIONAL CORPORATION
CASH AMERICA, INC. OF ALABAMA
CASH AMERICA, INC. OF COLORADO
CASH AMERICA, INC. OF INDIANA
CASH AMERICA, INC.
CASH AMERICA OF MISSOURI, INC.
VINCENT'S JEWELERS AND LOAN, INC.
By: /s/ Thomas A. Bessant, Jr.
----------------------------------------------
Thomas A. Bessant, Jr., Vice President for All
5
<PAGE> 1
EXHIBIT 10.3
FOURTH AMENDMENT TO
SENIOR REVOLVING CREDIT FACILITY AGREEMENT
THIS FOURTH AMENDMENT TO SENIOR REVOLVING CREDIT FACILITY AGREEMENT (the
"Fourth Amendment") is entered into as of the 7th day of June, 1995, by and
among NATIONSBANK OF TEXAS, N.A. ("NationsBank"), FIRST INTERSTATE BANK OF
TEXAS, N.A. ("First Interstate"), BANK ONE, TEXAS, N.A. ("Bank One"), THE
DAIWA BANK, LTD. ("Daiwa"), CITIBANK, N.A. ("Citibank") and BANK OF AMERICA
TEXAS, N.A. ("Bank of America") (such banks, and their successors and assigns,
are collectively referred to herein as "Banks"), TEXAS COMMERCE BANK NATIONAL
ASSOCIATION (successor by merger to Texas Commerce Bank, National Association)
("Texas Commerce"), for the purpose of Section 9 hereto only, CASH AMERICA
INTERNATIONAL, INC., a Texas corporation ("Company"), and NationsBank as
Issuing Bank and as Administrative Agent for Banks to the extent and in the
manner provided for in the "Credit Agreement" (defined below and herein so
called), with the acknowledgement, approval and agreement of all "Guarantors"
and "Consolidated Subsidiaries" (as each of such terms is defined in the Credit
Agreement) existing as of the date hereof.
W I T N E S S E T H:
WHEREAS, certain of the Banks, Texas Commerce, Company, Issuing Bank and
Administrative Agent are parties to that certain Senior Revolving Credit
Facility Agreement dated as of June 29, 1993, as amended by that certain First
Amendment to Senior Revolving Credit Facility Agreement, dated as of June 7,
1994, by that certain Second Amendment to Senior Revolving Credit Facility
Agreement, dated as of September 21, 1994, and by that certain Third Amendment
to Senior Revolving Credit Facility Agreement, dated as of March 10, 1995 (said
Credit Agreement, as amended, the "Credit Agreement"); and
WHEREAS, Company has requested to (i) remove Texas Commerce as a Bank
under the Credit Agreement, (ii) add Citibank and Bank of America as Banks
under the Credit Agreement, (iii) extend the Scheduled Maturity Date and (iv)
make certain other amendments to the Credit Agreement as set forth hereinbelow;
and
WHEREAS, Banks are willing to consent to such amendments, subject to the
terms and conditions of this Fourth Amendment; and
WHEREAS, the parties desire to amend the Credit Agreement by this Fourth
Amendment to reflect the agreements, modifications and amendments as set forth
hereinbelow;
NOW, THEREFORE, for and in consideration of the above premises and for
other good and valuable consideration, the parties hereto agree as follows:
<PAGE> 2
1. Definitions. Capitalized terms used in this Fourth Amendment which
are defined in the Credit Agreement, as amended by this Fourth Amendment, shall
have the same meanings as assigned therein when used herein, unless otherwise
provided herein or the context hereof shall otherwise require.
2. Representations and Warranties. In order to induce Banks to enter
into this Fourth Amendment, Company represents and warrants to Banks that:
A. Company, Guarantors and Consolidated Subsidiaries each have the
corporate power and requisite authority to execute, deliver and carry out the
terms and provisions of this Fourth Amendment, the Revolving Credit Notes, the
Credit Agreement, as amended hereby, and the other Loan Papers to be executed
by them, and Company, Guarantors and Consolidated Subsidiaries have each taken
all corporate action necessary to authorize such matters;
B. Each Affiliate of Company which has executed or shall execute any
Loan Papers (including without limitation Cash America Pawn L.P. and Cash
America Management L.P., each a Delaware limited partnership) has the power and
requisite authority to execute, deliver and carry out the terms and provisions
of such Loan Papers;
C. Neither the execution and delivery of this Fourth Amendment, the
Revolving Credit Notes nor any other documents executed by Company or any of
Guarantors, Consolidated Subsidiaries or other Affiliates of Company in
connection herewith, nor the consummation of any of the transactions herein or
therein contemplated, nor compliance with the terms and provisions hereof or
thereof, will contravene or conflict with any provision of law, statute or
regulation to which Company or any of its Subsidiaries or other Affiliates of
Company or any of Guarantors is subject or any judgment, license, order or
permit applicable to Company or any of its Subsidiaries or other Affiliates of
Company or any of Guarantors or any indenture, agreement or other instrument to
which Company or any of its Subsidiaries or other Affiliates of Company or
Guarantors may be subject; no consent, approval, authorization or order of any
court, Governmental Authority or third party is required in connection with the
execution and delivery of this Fourth Amendment, the Revolving Credit Notes or
any of the other documents executed and delivered in connection herewith or to
consummate the transactions contemplated herein or therein;
D. This Fourth Amendment, the Credit Agreement, as amended hereby,
the Revolving Credit Notes and the other Loan Papers are the legal and binding
obligations of the parties executing such documents, enforceable in accordance
with their respective terms, except as limited by bankruptcy, insolvency or
other laws of general application relating to the enforcement of creditors'
rights;
E. As of the date of this Fourth Amendment, and after giving effect
hereto, no event has occurred and is continuing which constitutes an Event of
Default or a Potential Event of Default; and
-2-
<PAGE> 3
F. All of the representations and warranties of Company contained in
Article 6 of the Credit Agreement, as amended by this Fourth Amendment, are
true and correct as of the date hereof.
3. Conditions Precedent. This Fourth Amendment and the obligations of
Banks hereunder are subject to the condition precedent that Administrative
Agent shall have received for each Bank the following, each in form and
substance satisfactory to Administrative Agent and such Bank:
A. Fourth Amendment. A fully executed original counterpart of this
Fourth Amendment, signed by duly authorized officers of all of the parties
hereto;
B. First Revolving Credit Notes. A duly executed First Revolving
Credit Note, drawn to the order of such Bank in the form of Exhibit "A"
attached hereto, with appropriate insertions and otherwise complying with the
provisions of the Credit Agreement as amended by this Fourth Amendment.
C. Second Revolving Credit Notes. A duly executed Second Revolving
Credit Note, drawn to the order of such Bank in the form of Exhibit "B"
attached hereto, with appropriate insertions and otherwise complying with the
provisions of the Credit Agreement as amended by this Fourth Amendment.
D. Officers' Certificates. A Certificate signed by duly authorized
officers of Company and all Guarantors and Consolidated Subsidiaries stating
(in their representative capacities, but not in their individual capacities)
that (to the best knowledge and belief of such officers, after reasonable
investigation and review of matters pertinent to the subject matter of such
certificate): (i) all of the representations and warranties contained in
Article 6 of the Credit Agreement, as amended by this Fourth Amendment, and the
other Loan Papers are true and correct as of the date hereof and will be true
and correct upon execution and delivery of this Fourth Amendment, the Revolving
Credit Notes, and all Loan Papers in connection herewith and after giving
effect hereto and thereto; (ii) no event has occurred and is continuing, or
would result from the execution, delivery and performance of the Credit
Agreement, as amended by this Fourth Amendment, and the other Loan Papers which
constitutes an Event of Default or a Potential Event of Default; and (iii) the
Officer Certificates and all attachments thereto (including copies of
resolutions, articles of incorporation, partnership agreements and by-laws)
which have previously been delivered to Administrative Agent and Banks by
Company, Guarantors and Consolidated Subsidiaries and their respective officers
are true and correct, have not been altered (except as specifically noted) and
are in full force and effect.
E. Texas Commerce. Texas Commerce shall have received all accrued
and unpaid portion of Advances, interest, fees and all other amounts owing to
but not including the date of this Fourth Amendment.
- 3 -
<PAGE> 4
F. Other Items. Such other items as Administrative Agent or Banks
may reasonably request prior to the execution, delivery and acceptance of this
Fourth Amendment.
4. Amendments to Credit Agreement. Effective as of the date of this
Fourth Amendment, and subject only to the conditions precedent set forth in
Section 3 hereof, the Credit Agreement shall be, and is hereby, amended as
follows:
A. Section 1.65 of the Credit Agreement is hereby amended by
deleting the term "Letter of Credit Reimbursement Agreements" and inserting the
defined term "Letter of Credit Application Agreement" in lieu thereof.
B. Section 1.71 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
1.71 "Note Agreement" shall mean that certain Note Agreement
dated May 6, 1993, entered into by and between Company and Teachers,
in connection with the indebtedness described in clause (i) of the
definition of Private Placement Debt.
C. Section 1.82 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
1.82 "Private Placement Debt" shall mean the indebtedness of
Company (and Guaranty of Domestic Subsidiaries) in the aggregate
original principal amount of (i) $30,000,000 under its senior notes
designated "8.33% Senior Notes Due May 1, 2003," payable in accordance
with the terms of such notes and the Note Agreement and (ii)
$20,000,000 under its senior notes designated "8.14% Senior Notes Due
2007," payable pursuant to terms and provisions approved in writing by
Majority Banks prior to the issuance of such notes, which approval
shall not be unreasonably withheld, provided that the terms thereof
(A) are no more restrictive on Company and its Subsidiaries than the
debt described in clause (i) immediately preceding and (B) are
substantially similar to those terms set forth in that certain letter
dated May 30, 1995 from Teachers Insurance and Annuity Association of
America and the Summary of Proposed Terms attached thereto.
D. Section 1.93 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
1.93 "Scheduled Maturity Date" shall mean (i) with respect
to the First Revolving Credit Loans, April 30, 1998 and (i) with
respect to the Second Revolving Credit Loans, June 5, 1996, either of
which dates may be extended one or more times by written agreement
pursuant to the terms of Section 2.01(b) hereof.
- 4 -
<PAGE> 5
E. Section 2.01(a1) of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
(a1) Banks and Percentages. Each "Bank" which is a party to
this Credit Agreement is named below, and the "Percentage" of each
such Bank is set forth opposite its name below:
Bank Percentage
---- ----------
NationsBank of Texas, N.A. 26.0%
First Interstate Bank of Texas, N.A. 26.0%
Bank One, Texas, N.A. 22.0%
Citibank, N.A. 10.8%
The Daiwa Bank, Ltd. 8.0%
Bank of America Texas, N.A. 7.2%
-----
100.0%
F. Section 5.03 of the Credit Agreement is hereby amended by
amending the first sentence thereof to read as follows:
"5.03. Increased Costs. With respect to all Borrowings, if
any Governmental Authority, central bank or other comparable authority,
shall at any time impose, modify or deem applicable any taxation,
required level of reserves (including, without limitation, any imposed
by the Board of Governors of the Federal Reserve System but excluding
any reserve requirement included in the CD Reserve Requirement or
Eurodollar Reserve Requirement of such Bank), deposits, insurance or
capital (including any allocation of capital requirements or
conditions), or special deposit or similar requirement against assets
of, deposits with or for the account of, or credit extended by, any
Bank, or shall impose on any Bank (or its Eurodollar lending office) or
the interbank eurodollar market any other condition affecting its
Advances, any of its Notes, its obligation to make such Advances, its
commitment hereunder or its obligation to participate in Letters of
Credit; and the result of any of the foregoing is to increase the cost
to such Bank of making or maintaining such Advances, its commitment or
its obligation to participate in Letters of Credit, or to reduce the
amount (which increased cost or reduced amount are not otherwise
reflected in an increase in the Adjusted CD Rate or the Adjusted
Interbank Rate, as the case may be) of any sum received or receivable
by such Bank under this Credit Agreement, or under any of its Notes, by
an amount which such Bank deems, in good faith, to be material, then,
after demand by such Bank (with a copy to Administrative Agent),
Company shall pay
- 5 -
<PAGE> 6
to Administrative Agent, on the earlier to occur of (a) the last day
of the Interest Period with respect thereto, or (b) the date on which
such Advance is repaid or converted in accordance with the second
sentence immediately following this sentence, for the account of such
Bank, such additional amount or amounts as will compensate such Bank
for such increased cost or reduction."
5. Certain Loan Papers. Each of the undersigned Guarantors hereby
consents to the terms of this Fourth Amendment, the Revolving Credit Notes and
other Loan Papers and to the execution hereof and thereof and further agrees
and confirms that (i) the Joint and Several Guaranty and the Subrogation and
Contribution Agreement continue in full force and effect, (ii) neither the
execution of this Fourth Amendment, the Revolving Credit Notes or any other
Loan Papers in connection herewith or therewith, nor the consummation of the
transactions described herein or therein shall alter the liability or
obligations of any of the Guarantors under the terms of the Joint and Several
Guaranty and the Subrogation and Contribution Agreement, (iii) each reference
in the Joint and Several Guaranty and the Subrogation and Contribution
Agreement to the "Loan Agreement" or the "Senior Revolving Credit Facility
Agreement" shall be deemed to refer to the Credit Agreement, as amended by this
Fourth Amendment, and (iv) each reference in the Credit Agreement, the Joint
and Several Guaranty and the Subrogation and Contribution Agreement to "Banks"
or "Lenders", as appropriate, shall refer to NationsBank, First Interstate,
Bank One, Citibank, Daiwa and Bank of America.
6. Further Assurances. Company, its Subsidiaries and all Affiliates of
Company which shall ever execute Loan Papers, including without limitation
Guarantors, shall each make, execute or endorse, and acknowledge and deliver or
file or cause same to be done, all such documents, notices or other assurances,
and take all such other action consistent with the terms and provisions of the
Credit Agreement, as amended hereby, as Majority Banks or Administrative Agent
may, from time to time, deem reasonably necessary or proper in connection with
this Fourth Amendment.
7. Scope of Amendments. Any and all other provisions of the Credit
Agreement and any other Loan Papers are hereby amended and modified wherever
necessary and even though not specifically addressed herein, so as to conform
to the amendments and modifications set forth in this Fourth Amendment.
8. Limitation on Agreements. The amendments set forth herein are limited
in scope as described herein and shall not be deemed (a) to be a consent under
or waiver of any other term or condition in the Credit Agreement or any of the
Loan Papers, or (b) to prejudice any right or rights which any of Banks or
Administrative Agent now has or may have in the future under, or in connection
with the Credit Agreement, as amended hereby, the Notes, the other Loan Papers,
or any of the documents referred to herein or therein.
9. Texas Commerce Acknowledgement. By signing below, Texas Commerce
acknowledges and agrees that upon payment in full of the amounts specified in
Section 3E. of this
- 6 -
<PAGE> 7
Fourth Amendment, Texas Commerce shall no longer be a Bank or Lender, as
appropriate, under the Credit Agreement and the other Loan Papers and all its
rights and obligations thereunder shall terminate.
10. Governing Law. This Fourth Amendment has been prepared, is being
executed and delivered and is intended to be performed in the State of Texas,
and the substantive laws of such state and the applicable federal laws of the
United States of America shall govern the validity, construction, enforcement
and interpretation of this Fourth Amendment.
11. Multiple Counterparts. This Fourth Amendment may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same agreement, and any of the parties hereto may execute this Fourth
Amendment by signing any such counterpart.
By signing below where indicated, the undersigned, CASH AMERICA, INC. OF SOUTH
CAROLINA, FLORIDA CASH AMERICA, INC., GEORGIA CASH AMERICA, INC., CASH AMERICA,
INC. OF LOUISIANA, CASH AMERICA, INC. OF NORTH CAROLINA, CASH AMERICA, INC. OF
TENNESSEE, CASH AMERICA, INC. OKLAHOMA, CASH AMERICA, INC. OF KENTUCKY, CASH
AMERICA PAWN, INC. OF OHIO, CASH AMERICA MANAGEMENT L.P., CASH AMERICA PAWN
L.P., CASH AMERICA HOLDING, INC., EXPRESS CASH INTERNATIONAL CORPORATION
(successor in interest to Express Cash Acquisition, Inc.), CASH AMERICA, INC.
OF ALABAMA, CASH AMERICA, INC. OF COLORADO, CASH AMERICA, INC. OF INDIANA, CASH
AMERICA, INC. and CASH AMERICA OF MISSOURI, INC., as Consolidated Subsidiaries
and as Guarantors, and HARVEY & THOMPSON LIMITED, CAII PANTBELANING AKTIEBOLAG
and SVENSK PANTBELANING AB, as Consolidated Subsidiaries, do each acknowledge
and approve the Credit Agreement, as amended by this Fourth Amendment, and the
other Loan Papers, and the terms thereof, and specifically agree to comply with
all provisions therein and herein which refer to or affect such Guarantors, the
Joint and Several Guaranty, the Subrogation and Contribution Agreement and any
matter in connection therewith.
THE CREDIT AGREEMENT, AS AMENDED BY THIS FOURTH AMENDMENT, AND THE OTHER LOAN
PAPERS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
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- 7 -
<PAGE> 8
IN WITNESS WHEREOF, Company, Banks, Guarantors, Consolidated Subsidiaries,
Administrative Agent and Issuing Bank have executed this Fourth Amendment as of
the day and year first above written.
COMPANY
CASH AMERICA INTERNATIONAL, INC.
By: /s/ Thomas A. Bessant, Jr.
-------------------------------------
Thomas A. Bessant, Jr.
Vice President-Finance and Treasurer
- 8 -
<PAGE> 9
GUARANTORS
CASH AMERICA, INC. OF SOUTH CAROLINA
FLORIDA CASH AMERICA, INC.
GEORGIA CASH AMERICA, INC.
CASH AMERICA, INC. OF LOUISIANA
CASH AMERICA, INC. OF NORTH CAROLINA
CASH AMERICA, INC. OF TENNESSEE
CASH AMERICA, INC. OF OKLAHOMA
CASH AMERICA, INC. OF KENTUCKY
CASH AMERICA PAWN, INC. OF OHIO
CASH AMERICA MANAGEMENT L.P., a Delaware limited partnership, by its general
partner, Cash America Holding, Inc.
CASH AMERICA PAWN L.P., a Delaware limited partnership, by its general partner,
Cash America Holding, Inc.
CASH AMERICA HOLDING, INC.
EXPRESS CASH INTERNATIONAL CORPORATION, a Delaware corporation
CASH AMERICA, INC. OF ALABAMA
CASH AMERICA, INC. OF COLORADO
CASH AMERICA, INC. OF INDIANA
CASH AMERICA, INC.
CASH AMERICA OF MISSOURI, INC.
By: /s/ Thomas A. Bessant, Jr.
---------------------------------------------
Thomas A. Bessant, Jr. Vice President for All
- 9 -
<PAGE> 10
CONSOLIDATED SUBSIDIARIES
HARVEY & THOMPSON LIMITED
By: /s/ Daniel R. Feehan
--------------------------
Daniel R. Feehan, Director
SVENSK PANTBELANING AB
By: /s/ Daniel R. Feehan
--------------------------
Daniel R. Feehan, Director
CAII PANTBELANING AKTIEBOLAG
By: /s/ Daniel R. Feehan
---------------------------
Daniel R. Feehan, Director
- 10 -
<PAGE> 11
BANKS
NATIONSBANK OF TEXAS, N.A.
By: /s/ TODD SHIPLEY
--------------------------------
Todd Shipley
Senior Vice President
FIRST INTERSTATE BANK OF TEXAS, N.A.
By: /s/ KIMBERLY K. WHITE
--------------------------------
Kimberly K. White
Assistant Vice President
BANK ONE, TEXAS, N.A.
By: /s/ BARRY B. KROMANN
---------------------------------
Barry B. Kromann
Vice President
CITIBANK, N.A.
By: /s/ EDWARD LETTIERI
---------------------------------
Edward Lettieri
Vice President
- 11 -
<PAGE> 12
THE DAIWA BANK, LTD.
By: /s/ Kirk L. Stites
--------------------------------------
Kirk L. Stites
Vice President
By: /s/ Kim A. Uhlemann
--------------------------------------
Kim A. Uhlemann
Vice President
BANK OF AMERICA TEXAS, N.A.
By: /s/ Donald P. Hellman
--------------------------------------
Donald P. Hellman
Vice President
ACKNOWLEDGED AND AGREED:
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
By: /s/ Michael J. Burr
------------------------------------
Michael J. Burr Sr.
Vice President
- 12 -
<PAGE> 13
ADMINISTRATIVE AGENT AND ISSUING BANK
NATIONSBANK OF TEXAS, N.A.
By: /s/ Todd Shipley
----------------------------------
Todd Shipley
Senior Vice President
- 13 -
<PAGE> 14
FIFTH AMENDMENT TO
SENIOR REVOLVING CREDIT FACILITY AGREEMENT
THIS FIFTH AMENDMENT TO SENIOR REVOLVING CREDIT FACILITY AGREEMENT (the
"Fifth Amendment") is entered into as of the 13th day of November, 1995 (but
effective as of January 1, 1995), by and among NATIONSBANK OF TEXAS, N.A.
("NationsBank"), FIRST INTERSTATE BANK OF TEXAS, N.A. ("First Interstate"),
BANK ONE, TEXAS, N.A. ("Bank One"), THE DAIWA BANK, LTD. ("Daiwa"), CITIBANK,
N.A. ("Citibank"), and BANK OF AMERICA TEXAS, N.A. ("Bank of America") (such
banks, and their successors and assigns, are collectively referred to herein as
"Banks"), CASH AMERICA INTERNATIONAL, INC., a Texas corporation ("Company"),
and NationsBank as Issuing Bank and as Administrative Agent for Banks to the
extent and in the manner provided for in the "Credit Agreement" (defined below
and herein so called), with the acknowledgement, approval and agreement of all
"Guarantors" and "Consolidated Subsidiaries" (as each of such terms is defined
in the Credit Agreement) existing as of the date hereof.
W I T N E S S E T H:
WHEREAS, certain of the Banks, Company, Issuing Bank and Administrative
Agent are parties to that certain Senior Revolving Credit Facility Agreement
dated as of June 29, 1993, as amended by that certain First Amendment to Senior
Revolving Credit Facility Agreement, dated as of June 7, 1994, by that certain
Second Amendment to Senior Revolving Credit Facility Agreement, dated as of
September 21, 1994, by that certain Third Amendment to Senior Revolving Credit
Facility Agreement, dated as of March 10, 1995, and by that certain Fourth
Amendment to Senior Credit Facility Agreement, dated as of June 7, 1995 (said
Credit Agreement, as amended, the "Credit Agreement"); and
WHEREAS, Company has requested certain amendments to the Credit Agreement
as set forth hereinbelow; and
WHEREAS, Banks are willing to consent to such amendments, subject to the
terms and conditions of this Fifth Amendment; and
WHEREAS, the parties desire to amend the Credit Agreement by this Fifth
Amendment to reflect the agreements, modifications and amendments as set forth
hereinbelow;
NOW, THEREFORE, for and in consideration of the above premises and for
other good and valuable consideration, the parties hereto agree as follows:
1. Definitions. Capitalized terms used in this Fifth Amendment which are
defined in the Credit Agreement, as amended by this Fifth Amendment, shall have
the same meanings as assigned therein when used herein, unless otherwise
provided herein or the context hereof shall otherwise require.
<PAGE> 15
2. Representations and Warranties. In order to induce Banks to enter
into this Fifth Amendment, Company represents and warrants to Banks that:
A. Company, Guarantors and Consolidated Subsidiaries each have the
corporate power and requisite authority to execute, deliver and carry out the
terms and provisions of this Fifth Amendment, the Credit Agreement, as amended
hereby, and any other Loan Papers to be executed by them, and Company,
Guarantors and Consolidated Subsidiaries have each taken all corporate action
necessary to authorize such matters;
B. Each Affiliate of Company which has executed or shall execute any
Loan Papers has the power and requisite authority to execute, deliver and carry
out the terms and provisions of such Loan Papers;
C. Neither the execution and delivery of this Fifth Amendment nor
any other documents executed by Company or any of Guarantors, Consolidated
Subsidiaries or other Affiliates of Company in connection herewith, nor the
consummation of any of the transactions herein or therein contemplated, nor
compliance with the terms and provisions hereof or thereof, will contravene or
conflict with any provision of law, statute or regulation to which Company or
any of its Subsidiaries or other Affiliates of Company or any of Guarantors is
subject or any judgment, license, order or permit applicable to Company or any
of its Subsidiaries or other Affiliates of Company or any of Guarantors or any
indenture, agreement or other instrument to which Company or any of its
Subsidiaries or other Affiliates of Company or Guarantors may be subject; no
consent, approval, authorization or order of any court, Governmental Authority
or third party is required in connection with the execution and delivery of
this Fifth Amendment or any of the other documents executed and delivered in
connection herewith or to consummate the transactions contemplated herein or
therein;
D. This Fifth Amendment, the Credit Agreement, as amended hereby,
and the other Loan Papers are the legal and binding obligations of the parties
executing such documents, enforceable in accordance with their respective
terms, except as limited by bankruptcy, insolvency or other laws of general
application relating to the enforcement of creditors' rights;
E. As of the date of this Fifth Amendment, and after giving effect
hereto and to the waiver set forth in that certain letter from Administrative
Agent (on behalf of Majority Banks) to Company dated May 12, 1994, no event has
occurred and is continuing which constitutes an Event of Default or a Potential
Event of Default; and
F. All of the representations and warranties of Company contained in
Article 6 of the Credit Agreement, as amended by this Fifth Amendment and after
giving effect to the waiver set forth in that certain letter from
Administrative Agent (on behalf of Majority Banks) to Company dated May 12,
1994, are true and correct as of the date hereof.
-2-
<PAGE> 16
3. Conditions Precedent. This Fifth Amendment and the obligations of
Banks hereunder are subject to the condition precedent that Administrative
Agent shall have received for each Bank the following, each in form and
substance satisfactory to Administrative Agent and such Bank:
A. Fifth Amendment. A fully executed original counterpart of this
Fifth Amendment, signed by duly authorized officers of Company, all Guarantors
and Consolidated Subsidiaries and Majority Banks;
B. Officers' Certificates. A Certificate signed by duly authorized
officers of Company and all Guarantors and Consolidated Subsidiaries stating
(in their representative capacities, but not in their individual capacities)
that (to the best knowledge and belief of such officers, after reasonable
investigation and review of matters pertinent to the subject matter of such
certificate) and after giving effect to the waiver set forth in that certain
letter from Administrative Agent (on behalf of Majority Banks) to Company dated
May 12, 1994: (i) all of the representations and warranties contained in
Article 6 of the Credit Agreement, as amended by this Fifth Amendment, and the
other Loan Papers are true and correct as of the date hereof and will be true
and correct upon execution and delivery of this Fifth Amendment and all Loan
Papers in connection herewith and after giving effect hereto and thereto; (ii)
no event has occurred and is continuing, or would result from the execution,
delivery and performance of the Credit Agreement, as amended by this Fifth
Amendment, and the other Loan Papers which constitutes an Event of Default or a
Potential Event of Default; and (iii) the Officer Certificates and all
attachments thereto (including copies of resolutions, articles of
incorporation, partnership agreements and by-laws) which have previously been
delivered to Administrative Agent and Banks by Company, Guarantors and
Consolidated Subsidiaries and their respective officers are true and correct,
have not been altered (except as specifically noted) and are in full force and
effect.
C. Other Items. Such other items as Administrative Agent or Banks
may reasonably request prior to the execution, delivery and acceptance of this
Fifth Amendment.
4. Amendments to Credit Agreement. Effective as of January 1, 1995, and
subject only to the conditions precedent set forth in Section 3 hereof, the
Credit Agreement shall be, and is hereby, amended as follows:
A. Section 1.106A of the Credit Agreement is hereby amended by
adding the defined term "Adjustment of Revenue Recognition" thereto in proper
alphabetical order to read as follows:
"'Adjustment of Revenue Recognition' shall mean (i) the accrual
by Company and its Consolidated Subsidiaries of pawn service charges
on a constant basis over the loan term for those loans with respect to
which Company deems collection to be probable and (ii) with respect to
loans not repaid, the calculation
- 3 -
<PAGE> 17
of the carrying value of the forfeited collateral (inventory) at the
lower of cost (the principal amount advanced) or market."
B. Section 1.24 of the Credit Agreement is hereby amended and
restated to read as follows:
"1.24 'Consolidated Adjusted Net Income' or 'Consolidated
Adjusted Net Loss' shall mean, with respect to any period,
consolidated net earnings or loss (after income taxes) of Company and
its Consolidated Subsidiaries for such period, determined in
accordance with GAAP, but excluding (i) any gain or loss in excess of
$1,000,000 (before income taxes) arising from the sale of capital
assets; (ii) the charge of approximately $19,772,000 against the
Company's 1995 earnings for the cumulative effect (through December
31, 1994) of the Adjustment of Revenue Recognition; and (iii) any
other items which would be considered extraordinary items, in
accordance with GAAP."
C. Subsection (a) of Section 8.14 of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
"(a) Consolidated Indebtedness and Letter of Credit
Liability to Consolidated Funded Debt plus Consolidated Net Worth.
Company shall not permit the sum of (i) Consolidated Indebtedness plus
(ii) Letter of Credit Facility to exceed the product obtained by
multiplying the sum of (iii) Consolidated Funded Debt plus (iv)
Consolidated Net Worth by (A) 0.55 with respect to each fiscal quarter
ended on or before September 30, 1996 and (B) 0.50 with respect to
each fiscal quarter thereafter."
D. The dollar amount "$95,000,000" set forth in clause (i) of
Subsection (b) of Section 8.14 of the Credit Agreement is hereby amended to be
"$75,000,000".
E. Section 9.01 of the Credit Agreement is hereby amended by (i)
deleting "and" at the end of clause (xii) thereof, (ii) deleting "." at the end
of clause (xiii) thereof and inserting "and" in lieu thereof and (iii) adding a
new clause (xiv) thereto to read as follows:
"(xiv) indebtedness of Svensk Pantbelaning AB pursuant to a
loan agreement with Skandinaviska Enskilda Banken Corporation not to
exceed SEK 10,000,000 in aggregate principal amount."
F. Section 9.08 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"9.08 Name, Fiscal Year and Accounting Firm and Method.
Company will not, and will not permit any of Subsidiaries to, change
its name, Fiscal Year (except after providing 30-days' prior written
notice to Banks), principal
- 4 -
<PAGE> 18
accounting firm to an accounting firm other than an Accounting Firm,
or method of accounting, unless (i) required under GAAP or (ii) in
respect of the Adjustment of Revenue Recognition."
5. Certain Loan Papers. Each of the undersigned Guarantors hereby
consents to the terms of this Fifth Amendment and other Loan Papers and to the
execution hereof and thereof and further agrees and confirms that (i) the Joint
and Several Guaranty and the Subrogation and Contribution Agreement continue in
full force and effect, (ii) neither the execution of this Fifth Amendment or
any other Loan Papers in connection herewith or therewith, nor the consummation
of the transactions described herein or therein shall alter the liability or
obligations of any of the Guarantors under the terms of the Joint and Several
Guaranty and the Subrogation and Contribution Agreement, (iii) each reference
in the Joint and Several Guaranty and the Subrogation and Contribution
Agreement to the "Loan Agreement" or the "Senior Revolving Credit Facility
Agreement" shall be deemed to refer to the Credit Agreement, as amended by this
Fifth Amendment, and (iv) each reference in the Credit Agreement, the Joint and
Several Guaranty and the Subrogation and Contribution Agreement to "Banks" or
"Lenders", as appropriate, shall refer to NationsBank, First Interstate, Bank
One, Citibank, Daiwa and Bank of America.
6. Further Assurances. Company, its Subsidiaries and all Affiliates of
Company which shall ever execute Loan Papers, including without limitation
Guarantors, shall each make, execute or endorse, and acknowledge and deliver or
file or cause same to be done, all such documents, notices or other assurances,
and take all such other action consistent with the terms and provisions of the
Credit Agreement, as amended hereby, as Majority Banks or Administrative Agent
may, from time to time, deem reasonably necessary or proper in connection with
this Fifth Amendment.
7. Scope of Amendments. Any and all other provisions of the Credit
Agreement and any other Loan Papers are hereby amended and modified wherever
necessary and even though not specifically addressed herein, so as to conform
to the amendments and modifications set forth in this Fifth Amendment.
8. Limitation on Agreements. The amendments set forth herein are limited
in scope as described herein and shall not be deemed (a) to be a consent under
or waiver of any other term or condition in the Credit Agreement or any of the
Loan Papers, or (b) to prejudice any right or rights which any of Banks or
Administrative Agent now has or may have in the future under, or in connection
with the Credit Agreement, as amended hereby, the Notes, the other Loan Papers,
or any of the documents referred to herein or therein.
9. Governing Law. This Fifth Amendment has been prepared, is being
executed and delivered and is intended to be performed in the State of Texas,
and the substantive laws of such
- 5 -
<PAGE> 19
state and the applicable federal laws of the United States of America shall
govern the validity, construction, enforcement and interpretation of this Fifth
Amendment.
10. Multiple Counterparts. This Fifth Amendment may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same agreement, and any of the parties hereto may execute this Fifth
Amendment by signing any such counterpart.
By signing below where indicated, the undersigned, CASH AMERICA, INC. OF SOUTH
CAROLINA, FLORIDA CASH AMERICA, INC., GEORGIA CASH AMERICA, INC., CASH AMERICA,
INC. OF LOUISIANA, CASH AMERICA, INC. OF NORTH CAROLINA, CASH AMERICA, INC. OF
TENNESSEE, CASH AMERICA, INC. OKLAHOMA, CASH AMERICA, INC. OF KENTUCKY, CASH
AMERICA PAWN, INC. OF OHIO, CASH AMERICA MANAGEMENT L.P., CASH AMERICA PAWN
L.P., CASH AMERICA HOLDING, INC., EXPRESS CASH INTERNATIONAL CORPORATION
(successor in interest to Express Cash Acquisition, Inc.), CASH AMERICA, INC.
OF ALABAMA, CASH AMERICA, INC. OF COLORADO, CASH AMERICA, INC. OF INDIANA, CASH
AMERICA, INC., CASH AMERICA OF MISSOURI, INC.and VINCENT'S JEWELERS AND LOAN,
INC., as Consolidated Subsidiaries and as Guarantors, and HARVEY & THOMPSON
LIMITED, CAII PANTBELANING AKTIEBOLAG and SVENSK PANTBELANING AB, as
Consolidated Subsidiaries, do each acknowledge and approve the Credit
Agreement, as amended by this Fifth Amendment, and the other Loan Papers, and
the terms thereof, and specifically agree to comply with all provisions therein
and herein which refer to or affect such Guarantors, the Joint and Several
Guaranty, the Subrogation and Contribution Agreement and any matter in
connection therewith.
THE CREDIT AGREEMENT, AS AMENDED BY THIS FIFTH AMENDMENT, AND THE OTHER LOAN
PAPERS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
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* *
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* *
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- 6 -
<PAGE> 20
IN WITNESS WHEREOF, Company, Banks, Guarantors, Consolidated Subsidiaries,
Administrative Agent and Issuing Bank have executed this Fifth Amendment as of
the day and year first above written, effective as of January 1, 1995.
COMPANY
CASH AMERICA INTERNATIONAL, INC.
By: /s/ THOMAS A. BESSANT, JR.
------------------------------------
Thomas A. Bessant, Jr.
Vice President-Finance and Treasurer
- 7 -
<PAGE> 21
GUARANTORS
CASH AMERICA, INC. OF SOUTH CAROLINA
FLORIDA CASH AMERICA, INC.
GEORGIA CASH AMERICA, INC.
CASH AMERICA, INC. OF LOUISIANA
CASH AMERICA, INC. OF NORTH CAROLINA
CASH AMERICA, INC. OF TENNESSEE
CASH AMERICA, INC. OF OKLAHOMA
CASH AMERICA, INC. OF KENTUCKY
CASH AMERICA PAWN, INC. OF OHIO
CASH AMERICA MANAGEMENT L.P., a Delaware limited partnership, by its general
partner, Cash America Holding, Inc.
CASH AMERICA PAWN L.P., a Delaware limited partnership, by its general partner,
Cash America Holding, Inc.
CASH AMERICA HOLDING, INC.
EXPRESS CASH INTERNATIONAL CORPORATION, a Delaware corporation
CASH AMERICA, INC. OF ALABAMA
CASH AMERICA, INC. OF COLORADO
CASH AMERICA, INC. OF INDIANA
CASH AMERICA, INC.
CASH AMERICA OF MISSOURI, INC.
VINCENT'S JEWELERS AND LOAN, INC.
By: /s/ THOMAS A. BESSANT, JR.
---------------------------------------------
Thomas A. Bessant, Jr. Vice President for All
- 8 -
<PAGE> 22
CONSOLIDATED SUBSIDIARIES
HARVEY & THOMPSON LIMITED
By: /s/ DANIEL R. FEEHAN
--------------------------
Daniel R. Feehan, Director
SVENSK PANTBELANING AB
By: /s/ DANIEL R. FEEHAN
--------------------------
Daniel R. Feehan, Director
CAII PANTBELANING AKTIEBOLAG
By: /s/ DANIEL R. FEEHAN
--------------------------
Daniel R. Feehan, Director
- 9 -
<PAGE> 23
BANKS
NATIONSBANK OF TEXAS, N.A.
By: /s/ TODD SHIPLEY
--------------------------------
Todd Shipley
Senior Vice President
FIRST INTERSTATE BANK OF TEXAS, N.A.
By: /s/ KIMBERLY K. WHITE
--------------------------------
Kimberly K. White
Assistant Vice President
BANK ONE, TEXAS, N.A.
By: ________________________________
Name: __________________________
Title: _________________________
CITIBANK, N.A.
By: /s/ MARJORIE FUTORNICK
--------------------------------
Marjorie Futornick
Vice President
- 10 -
<PAGE> 24
THE DAIWA BANK, LTD.
By: /s/ Kirk L. Stites
---------------------------------
Kirk L. Stites
Vice President
By: /s/ James T. Wang
---------------------------------
James T. Wang
Vice President
BANK OF AMERICA TEXAS, N.A.
By: /s/ Donald P. Hellman
---------------------------------
Donald P. Hellman
Vice President
- 11 -
<PAGE> 25
ADMINISTRATIVE AGENT AND ISSUING BANK
[S]
NATIONSBANK OF TEXAS, N.A.
By: /s/ Todd Shipley
-----------------------
Todd Shipley
Senior Vice President
- 12 -
<PAGE> 1
EXHIBIT 18
November 10, 1995
Mr. Daniel R. Feehan
President & Principal Financial Officer
Cash America International, Inc.
1600 West 7th Street
Fort Worth, Texas 76102-2599
Dear Mr. Feehan:
We are providing this letter to you for inclusion as an exhibit to your Form
10-Q filing pursuant to Item 601 of Regulation S-K.
We have read management's justification for the change in accounting principle
as disclosed in the Company's Form 10-Q for the quarter ended September 30,
1995. Based on our reading of the data and discussions with Company officials
of the business judgment and business planning factors relating to the change,
we believe management's justification to be reasonable. Accordingly, in
reliance on management's determination as regards elements of business judgment
and business planning we concur that the newly adopted accounting principle
described above is preferable in the Company's circumstances to the method
previously applied.
We have not audited any financial statements of Cash America International,
Inc. as of any date or for any period subsequent to December 31, 1994, nor have
we audited the application of the change in accounting principle disclosed in
Form 10-Q of Cash America International, Inc. for nine months ended September
30, 1995, accordingly, our comments are subject to revision on completion of an
audit of the financial statements that include the accounting change.
Very truly yours,
COOPERS & LYBRAND L.L.P.
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<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 6,980
<SECURITIES> 0
<RECEIVABLES> 98,914
<ALLOWANCES> 0
<INVENTORY> 59,085
<CURRENT-ASSETS> 182,835
<PP&E> 100,942
<DEPRECIATION> 34,804
<TOTAL-ASSETS> 321,860
<CURRENT-LIABILITIES> 14,530
<BONDS> 135,738
<COMMON> 3,024
0
0
<OTHER-SE> 168,568
<TOTAL-LIABILITY-AND-EQUITY> 321,860
<SALES> 119,845
<TOTAL-REVENUES> 178,003
<CGS> 69,784
<TOTAL-COSTS> 134,133
<OTHER-EXPENSES> 23,917
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,700
<INCOME-PRETAX> 11,990
<INCOME-TAX> 4,613
<INCOME-CONTINUING> 7,377
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<EXTRAORDINARY> 0
<CHANGES> (19,772)
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