<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 June 30, 1997
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 Identification No.)
organization)
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:
24,288,396 common shares, $.10 par value, were outstanding as of July 31, 1997
===============================================================================
<PAGE> 2
CASH AMERICA INTERNATIONAL, INC.
INDEX TO 10-Q
<TABLE>
<CAPTION>
PART I. FINANCIAL STATEMENTS
Page
<S> <C> <C>
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets - June 30, 1997
and 1996 and December 31, 1996.................................. 1
Consolidated Statements of Income - Three Months and
Six Months Ended June 30, 1997 and 1996......................... 2
Consolidated Statements of Stockholders' Equity -
Six Months Ended June 30, 1997 and 1996......................... 3
Consolidated Statements of Cash Flows -
Six Months Ended June 30, 1997 and 1996......................... 4
Notes to Consolidated Financial Statements...................... 5
Item 2. Management's Discussion and Analysis of
Results of Operations and Financial Condition............ 8
PART II. OTHER INFORMATION............................................ 21
SIGNATURE.............................................................. 23
</TABLE>
<PAGE> 3
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
June 30 December 31
1997 1996 1996
--------- --------- -----------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,994 $ 2,092 $ 1,334
Loans 109,815 95,125 107,679
Merchandise held for disposition, net 47,233 47,617 48,777
Finance and service charges receivable 15,948 12,492 15,248
Prepaid expenses and other 5,131 4,804 5,293
Deferred tax asset 11,507 10,912 11,643
--------- --------- ---------
Total current assets 191,628 173,042 189,974
Property and equipment, net 63,573 61,896 62,818
Intangible assets, net 65,659 62,199 66,065
Other assets 7,031 10,185 6,225
--------- --------- ---------
Total assets $ 327,891 $ 307,322 $ 325,082
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ -- $ -- $ --
Accounts payable and accrued expenses $ 12,284 $ 8,659 $ 13,959
Customer deposits 3,800 3,843 2,955
Income taxes currently payable 3,390 432 3,776
Deferred income taxes
Current portion of long-term debt 4,286 4,286 4,286
--------- --------- ---------
Total current liabilities 23,760 17,220 24,976
Long-term debt:
Bank lines of credit 104,448 63,914 100,365
Notes payable, net of current portion 41,429 45,714 45,714
--------- --------- ---------
145,877 109,628 146,079
Stockholders' equity:
Common stock, $.10 par value per
share, 80,000,000 shares authorized 3,024 3,024 3,024
Paid in surplus 121,919 121,878 121,878
Retained earnings 82,168 66,988 75,973
Notes receivable - stockholders (841) (1,056) (1,065)
Foreign currency translation adjustment (1,983) (3,713) (386)
--------- --------- ---------
204,287 187,121 199,424
Less - shares held in treasury, at cost (46,033) (6,647) (45,397)
--------- --------- ---------
Total stockholders' equity 158,254 180,474 154,027
--------- --------- ---------
Total liabilities and stockholders' equity $ 327,891 $ 307,322 $ 325,082
========= ========= =========
</TABLE>
===============================================================================
See notes to consolidated financial statements.
Page 1
<PAGE> 4
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data) (UNAUDITED)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
------------------------- -------------------------
1997 1996 1997 1996
<S> <C> <C> <C> <C>
REVENUES
Finance and service charge revenues $ 24,967 $ 21,796 $ 50,438 $ 43,332
Proceeds from disposition of merchandise 43,975 44,131 94,139 91,135
Royalties and franchise fees 477 -- 1,361 --
---------- ---------- ---------- ----------
TOTAL REVENUES 69,419 65,927 145,938 134,467
Cost of disposed merchandise 27,738 27,659 60,199 56,699
---------- ---------- ---------- ----------
NET REVENUES 41,681 38,268 85,739 77,768
---------- ---------- ---------- ----------
OPERATING EXPENSES
Operations 24,678 22,377 49,919 45,222
Administration 5,520 4,797 11,262 9,592
Amortization 773 931 1,654 1,787
Depreciation 3,128 3,105 6,389 6,210
---------- ---------- ---------- ----------
Total operating expenses 34,099 31,210 69,224 62,811
---------- ---------- ---------- ----------
INCOME FROM OPERATIONS 7,582 7,058 16,515 14,957
Interest expense, net 2,751 2,245 5,557 4,737
Other expense 93 305 151 487
---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAXES 4,738 4,508 10,807 9,733
Provision for income taxes 1,727 1,738 4,006 3,753
---------- ---------- ---------- ----------
NET INCOME $ 3,011 $ 2,770 $ 6,801 $ 5,980
========== ========== ========== ==========
==============================================================================================================
Earnings per share - Fully diluted $0.12 $0.10 $0.27 $0.21
Weighted average shares - Fully diluted 25,082 28,809 25,108 28,805
==============================================================================================================
</TABLE>
See notes to consolidated financial statements.
Page 2
<PAGE> 5
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Six Months Ended June 30, 1997 and 1996
(In thousands, except share data) (UNAUDITED)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCK TREASURY STOCK
----------------------- PAID IN RETAINED ---------------------
SHARES AMOUNT SURPLUS EARNINGS SHARES AMOUNT
----------- ---------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balance at
December 31, 1996 30,235,164 $ 3,024 $ 121,878 $ 75,973 5,975,670 $ (45,397)
Net income 6,801
Dividends declared (606)
Treasury shares acquired 141,754 (1,304)
Treasury shares reissued 16 (87,838) 668
Tax benefit from exercise
of option shares 25
Reduction in stockholders
notes receivable
Foreign currency
translation adjustment
----------- ---------- --------- ---------- --------- ----------
Balance at
June 30, 1997 30,235,164 $ 3,024 $ 121,919 $ 82,168 6,029,586 $ (46,033)
=========== ========== ========= ========== ========= ==========
=============================================================================================================
Balance at
December 31, 1995 30,235,164 $ 3,024 $ 121,840 $ 61,727 1,495,285 $ (6,734)
Net income 5,980
Dividends declared (719)
Treasury shares reissued 27 (19,331) 87
Tax benefit from exercise
of option shares 11
Reduction in stockholders
notes receivable
Foreign currency
translation adjustment
----------- ---------- --------- ---------- --------- ----------
Balance at
June 30, 1996 30,235,164 $ 3,024 $ 121,878 $ 66,988 1,475,954 $ (6,647)
=========== ========== ========= ========== ========= ==========
- -------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
NOTES FOREIGN
RECEIVABLE CURRENCY
STOCK- TRANSLATION
HOLDERS ADJUSTMENT TOTAL
---------- ------------- ---------
<S> <C> <C> <C>
Balance at
December 31, 1996 $ (1,065) $ (386) $ 154,027
Net income 6,801
Dividends declared (606)
Treasury shares acquired (1,304)
Treasury shares reissued 684
Tax benefit from exercise
of option shares 25
Reduction in stockholders
notes receivable 224 224
Foreign currency
translation adjustment (1,597) (1,597)
---------- ------------- ---------
Balance at
June 30, 1997 $ (841) $ (1,983) $ 158,254
========== ============= =========
===========================================================================
Balance at
December 31, 1995 $ (1,071) $ (3,834) $ 174,952
Net income 5,980
Dividends declared (719)
Treasury shares reissued 114
Tax benefit from exercise
of option shares 11
Reduction in stockholders
notes receivable 15 15
Foreign currency
translation adjustment 121 121
---------- ------------- ---------
Balance at
June 30, 1996 $ (1,056) $ (3,713) $ 180,474
========== ============= =========
- ----------------------------------------------------------------------------
</TABLE>
See notes to consolidated financial statements.
Page 3
<PAGE> 6
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Six Months Ended
June 30
------------------------
1997 1996
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Reconciliation of Net Income to Net Cash
Provided By Operating Activities:
Net income $ 6,801 $ 5,980
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization 1,654 1,787
Depreciation 6,389 6,210
Increase in finance and service charges receivable (1,065) (598)
Decrease in merchandise held for disposition 2,187 9,067
Decrease in prepaid expenses and other 215 71
Decrease in accounts payable and
accrued expenses (1,786) (905)
Increase in layaway deposits, net 828 317
Decrease in income taxes payable (310) (2,141)
Deferred taxes (352) 1,427
--------- ---------
Net cash provided by operating activities 14,561 21,215
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Loans forfeited and transferred to merchandise held for disposition 53,741 43,211
Loans repaid or renewed 132,487 122,040
Loans made, including loans renewed (190,779) (172,138)
--------- ---------
Net increase in loans (4,551) (6,887)
Acquisitions (3,715) (459)
Net (advances to) payments from affiliates (350) (1,750)
Purchases of property and equipment (7,253) (3,092)
--------- ---------
Net cash used by investing activities (15,869) (12,188)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings (payments) under bank lines of credit 7,329 (9,736)
Payment on notes payable (4,286) --
Net payments on notes receivable stockholders 224 15
Proceeds from issuance of stock, net 684 114
Treasury shares acquired (1,304) --
Dividends paid (605) (719)
--------- ---------
Net cash provided (used) by financing activities 2,042 (10,326)
--------- ---------
EFFECT OF EXCHANGE RATE CHANGES ON CASH (74) (44)
--------- ---------
INCREASE IN CASH AND CASH EQUIVALENTS 660 (1,343)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,334 3,435
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,994 $ 2,092
========= =========
</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. The Company has a 49% ownership interest in
Express Rent A Tire, Ltd. ("Express"). The investment is being accounted for
using the equity method of accounting, whereby the Company records its 49%
share of earnings or losses in its consolidated financial statements. Effective
December 31, 1996, the Company acquired the remaining 51% interest in its
affiliate, Mr. Payroll Corporation ("Mr. Payroll") (see note 2).
The financial statements as of June 30, 1997 and 1996 and for the
three months and six 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 six 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
months and six months ended June 30, 1996, have been reclassified to conform
with the presentation format adopted in 1997. 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 1996 Annual Report to Stockholders.
NOTE 2 - INVESTMENTS IN AFFILIATES
Effective upon the close of business December 31, 1996, the Company
acquired, in a purchase transaction, the remaining 51% interest in its
affiliate, Mr. Payroll. The aggregate purchase price of the 51% interest is to
be paid in three annual installments in an amount equal to .9775 times the
defined after-tax net income of Mr. Payroll for the 1996, 1997 and 1998 fiscal
years, respectively. No consideration is payable based on Mr. Payroll's results
of operations in 1996.
The Company has a 49% interest in Express, a private entity which
offers automobile and truck 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 $3
million from the Company. Interest is payable quarterly at a rate reset monthly
that is equivalent to LIBOR
Page 5
<PAGE> 8
plus 4%. As of June 30, 1997, Express had borrowings outstanding of $2,750,000.
The entire unpaid principal is due and payable on February 28, 1998. The
amounts are included in other assets.
NOTE 3 - LONG-TERM DEBT
The Company's long-term debt at June 30 consisted of:
<TABLE>
<CAPTION>
1997 1996
- ------------------------------------------------------------------------------------------------------
(In thousands)
<S> <C> <C>
Debt Obligations:
U.S. Line of Credit up to $125 million
due June 30, 2001 $ 78,225 $ 34,700
U.K. Line of Credit up to(pound)5 million
due April 30, 1999 2,247 1,242
Swedish Line of Credit up to SEK 30 million
due June 30, 1998 -0- -0-
Swedish Kronor term loan
due September 30, 1998 23,976 27,972
8.33% senior unsecured notes due 2003 25,715 30,000
8.14% senior unsecured notes due 2007 20,000 20,000
-------- --------
150,163 113,914
Less current portion 4,286 4,286
-------- --------
Total Long-Term Debt $145,877 $109,628
======== ========
</TABLE>
Interest on the U.S. Line of Credit is paid quarterly at rates
determined, at the Company's option of either the base rate as specified by the
Agent Bank, or a margin over LIBOR, based on the Company's debt-to-total
capital ratio, measured quarterly. As of June 30, 1997, the Company has the
option of borrowing at LIBOR plus 1%. On December 10, 1996, the Company entered
into an interest rate cap agreement for three years ending December 10, 1999,
that limits the maximum LIBOR interest rate to 6% on $20,000,000 of debt.
Interest on the U.K. Line of Credit is payable quarterly at an
interest rate equal to the Bank's sterling cost of funds plus 60 basis points
for borrowings less than 14 days and 55 basis points for borrowings of 14 days
or more.
Interest on the Swedish Line of Credit is payable quarterly at an
interest rate equal to the Bank's base funding rate plus 1%, and interest on
the Swedish Term Loan is payable periodically at the Stockholm InterBank
Offered Rate (STIBOR) plus 1%.
The Company has entered into a floating-to-fixed interest rate
exchange agreement on SEK 118,750,000 (approximately $15,385,000 as of June 30,
1997) at 10.94% through August 17, 1998. The effective rate of interest under
the loan at June 30, 1997, was 8.91% after taking into account the interest
rate exchange agreement.
Page 6
<PAGE> 9
NOTE 4 - EARNINGS PER SHARE
Primary and fully diluted earnings per share are computed based on net
income. The weighted average number of common shares outstanding during each
period is adjusted to give effect to stock options considered to be dilutive
common stock equivalents.
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128 ("FAS128"), which is
required to be adopted on December 31, 1997. At that time the Company will be
required to change the method currently used to compute earnings per share
("EPS") and to restate EPS for all prior periods reported.
The Company, in recognition of requirements under FAS128 has
determined the impact of basic and dilutive earnings per share. Basic earnings
per share is computed using net income divided by the weighted average number
of common shares outstanding. Dilutive earnings per share is computed using net
income divided by the weighted average number of shares adjusted to give effect
to the dilution from unexercised stock options.
The following table discloses the impact of FAS128 on the Company's
earnings per share for the three and six months ended June 30, 1997 and 1996,
respectively.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
----------------------------- --------------------------
(In thousands)
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Weighted average
common shares outstanding 24,194 28,750 24,219 28,745
Plus shares
applicable to options 754 4 693 1
------ ------ ------ ------
Adjusted weighted average
shares outstanding 24,948 28,754 24,912 28,746
====== ====== ====== ======
Net income $3,011 $2,770 $6,801 $5,980
Basic earnings per share $.12 $.10 $.28 $.21
Diluted earnings per share $.12 $.10 $.27 $.21
</TABLE>
NOTE 5 - LITIGATION
The Company is a defendant in certain lawsuits encountered in the
ordinary course of its business. In the opinion of management, the resolution
of these matters will not have a material adverse effect on the Company's
financial position or results of operations.
Page 7
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
SUMMARY CONSOLIDATED FINANCIAL DATA
SECOND QUARTER ENDED JUNE 30, 1997 vs.
SECOND QUARTER ENDED JUNE 30, 1996
- -------------------------------------------------------------------------------
The following table sets forth selected unaudited, consolidated financial
data with respect to the Company for the three months ended June 30, 1997 and
1996.
<TABLE>
<CAPTION>
1997 1996 Change
-------------- --------------- ---------------
($ in thousands)
<S> <C> <C> <C>
Finance and service charge revenues $24,967 $21,796 15%
Proceeds from disposition of merchandise 43,975 44,131 0%
Royalties and franchise fees 477 --- ---
-------------- --------------- ---------------
Total Revenues 69,419 65,927 5%
Cost of disposed merchandise 27,738 27,659 0%
-------------- --------------- ---------------
Net Revenues $41,681 $38,268 9%
-------------- --------------- ---------------
Other Data:
Annualized yield on loans 95% 98% (3)%
Average loan balance per
average location in operation $270 $239 13%
Average pawn loan amount at end of
period (not in thousands) $95 $93 2%
Margin on disposition of merchandise 36.9% 37.3% (1)%
Average annualized merchandise turnover 2.4X 2.2X 9%
Average merchandise held for disposition
balance per average location $119 $133 (11)%
Expenses as a percentage of net revenues:
Operations and administration 72.5% 71.0% 2%
Depreciation and amortization 9.4% 10.5% (10)%
Interest, net 6.6% 5.9% 12%
Pawn Locations in Operation:
Beginning of period 385 374
Acquired 6 1
Established 6 2
Combined (2) ---
-------------- ---------------
End of period 395 377 5%
============== =============== ===============
Average number of locations in
operation during the period (a) 389 375 4%
============== =============== ===============
</TABLE>
(a) Averages based on accumulation of month-end balances and dividing aggregate
total by total months in the period.
Page 8
<PAGE> 11
SIX MONTHS ENDED JUNE 30, 1997 vs
SIX MONTHS ENDED JUNE 30, 1996
- -------------------------------------------------------------------------------
The following table sets forth selected consolidated financial data with
respect to the Company for the six months ended June 30, 1997 and 1996.
<TABLE>
<CAPTION>
1997 1996 Change
-------------- --------------- ---------------
($ in thousands)
<S> <C> <C> <C>
Finance and service charge revenues $50,438 $43,332 16%
Proceeds from disposition of merchandise 94,139 91,135 3%
Royalties and franchise fees 1,361
-------------- --------------- ---------------
Total Revenues 145,938 134,467 9%
Cost of disposed merchandise 60,199 56,699 6%
-------------- --------------- ---------------
Net Revenues $85,739 $77,768 10%
-------------- --------------- ---------------
Other Data:
Annualized yield on loans 97% 98% (1)%
Average loan balance per
average location in operation $272 $237 15%
Average pawn loan amount at end of
period (not in thousands) $95 $93 2%
Margin on disposition of merchandise 36.1% 37.8% (4)%
Average annualized merchandise turnover 2.6X 2.2X 18%
Average merchandise held for disposition
balance per average location $122 $141 (13)%
Expenses as a percentage of net revenues:
Operations and administration 71.4% 70.4% 1%
Depreciation and amortization 9.4% 10.3% (9)%
Interest, net 6.5% 6.1% 7%
Pawn Locations in Operation:
Beginning of period 382 373
Acquired 6 1
Established 10 5
Combined (3) (2)
-------------- ---------------
End of period 395 377 5%
============== =============== ===============
Average number of locations in
operation during the period (a) 386 375 3%
============== =============== ===============
</TABLE>
(a) Averages based on accumulation of month-end balances and dividing aggregate
total by total months in the period.
Page 9
<PAGE> 12
GENERAL
The Company is a diversified provider of specialty financial
services to individuals in the United States, Great Britain, and Sweden. The
Company offers secured non-recourse loans to individuals, commonly referred to
as pawn loans. The revenue generated from pawn loan balances is finance and
service charge revenues. The revenue from the disposition of merchandise,
primarily from forfeited collateral on pawn loans, is a related but secondary
activity of the Company's lending function. In addition, the Company provides
check cashing services through its wholly owned subsidiary, Mr. Payroll
Corporation ("Mr. Payroll").
The Company expanded its pawn operations over the 18-month period
from December 31, 1995 through June 30, 1997 with the addition of 22 locations.
Eighteen locations were established, twelve operating units were acquired, and
eight locations were combined for a net addition of twenty-two pawn operating
units. At June 30, 1997, the Company operated 395 pawn units--347 in 15 states
in the United States, 37 jewelry-only and loan-only units in the United
Kingdom, and 11 loan-only and primarily jewelry-only units in Sweden.
The Company expanded its check cashing operations on December 31,
1996, when it acquired the remaining 51% interest in Mr. Payroll Corporation.
Mr. Payroll is a franchiser of check-cashing kiosks and service centers. The
1997 financial statement periods include the revenues and expenses of Mr.
Payroll. Previously, the Company recorded its 49% share of Mr. Payroll's losses
in its consolidated financial statements under the equity method of accounting.
SECOND QUARTER ENDED JUNE 30, 1997 COMPARED TO THE
SECOND QUARTER ENDED JUNE 30, 1996
RESULTS OF OPERATIONS
Finance and service charge revenues are impacted by changes in the
average outstanding amount of pawn loans and the annualized yield on such
loans. Finance and service charge revenues increased $3.2 million, or 15%, in
the second quarter of 1997 over the second quarter of 1996 because of a same
unit increase in the average outstanding amount of pawn loans of 15%, combined
with the impact of units in operation for less than one year. A 13% increase in
the number of outstanding pawn loans as of June 30, 1997, compared to June 30,
1996, reflects a higher customer demand for pawn loans in both domestic and
foreign markets.
The consolidated annual loan yield, which represents a weighted
average of the distinctive yields realized in the three countries in which the
Company operates, decreased to 95% in the second quarter of 1997 from 98% in
the second quarter of 1996. In its domestic operations, the Company
Page 10
<PAGE> 13
had a decrease in its loan yield to 126% for the second quarter of 1997,
compared to 128% for the second quarter of 1996. The decrease in the domestic
loan yield can be attributed to a 19% increase in pawn loans at June 30, 1997,
from the same period in 1996. At June 30, 1997, same unit domestic pawn loan
balances had increased 15% since June 30, 1996, with the additional 4% increase
coming from acquisitions of six units. Internationally, the blended yield on
average pawn loans outstanding decreased to 52% for the second quarter of 1997
from 57% for the same period in 1996. The decline was primarily the result of
lower returns on unredeemed collateral disposed of at auction.
Proceeds from the disposition of merchandise decreased $.2 million in
the second quarter of 1997 over the second quarter of 1996 even though proceeds
from the disposition of scrap jewelry decreased $1.7 million, or 39%. A 2% gain
from same units (those in operation more than one year) combined with the
impact of new units helped to offset the decrease in proceeds from the
disposition of scrap jewelry.
The Company's margin on disposition of merchandise decreased to 36.9%
in the second quarter of 1997, as compared to 37.3% for the second quarter of
1996. This decline in margin is due primarily to a much smaller margin on the
disposition of scrap jewelry during the second quarter of 1997, compared to the
same period of 1996, and the Company's continued emphasis on faster disposition
of merchandise. The lower margin on the disposition of scrap jewelry in 1997
reflects a decline in the price of gold. The merchandise turnover rate
increased to 2.4 times for 1997 as compared to 2.2 times for 1996.
Royalties and franchise fees revenue is generated from the Company's
check cashing operations. The revenue consists of franchise fees for new check
cashing franchises and royalties based on a percentage of check cashing fees
from existing franchise operations.
Operations and administration expense, as a percentage of net
revenues, was 72.5% in the second quarter of 1997, compared to 71% for the same
period in 1996. Total operations and administration expense increased $3
million in the second quarter of 1997, representing an 11% increase over the
second quarter of 1996. Domestic operations contributed $2 million of the
increase, due primarily to higher personnel and occupancy costs, with foreign
operations contributing $.2 million and the consolidation of Mr. Payroll adding
$.8 million, to the increase.
Depreciation and amortization as a percentage of net revenues
decreased to 9.4% in the second quarter of 1997, from 10.5% in the second
quarter of 1996, due to a moderation in the Company's expansion during the past
eighteen months.
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<PAGE> 14
Net interest expense, as a percentage of net revenues, increased to
6.6% in the second quarter of 1997 from 5.9% in the second quarter of 1996. The
dollar amount of interest expense increased by $.5 million, or 23%, due
primarily to additional debt incurred in the fourth quarter of 1996 to
repurchase 4.5 million shares of the Company's common stock. Average debt
outstanding increased 27% to $143.6 million for the second quarter of 1997 as
compared to $112.6 million for the second quarter of 1996. The Company's
effective rate of interest paid on its debt decreased to 7.7% for the second
quarter of 1997 from 8.1% for the second quarter of 1996.
Included in other expense for the second quarter of 1997, is a
$124,000 loss from the Company's affiliate. In the second quarter of 1996, the
Company recorded a $325,000 loss from affiliates. The loss from affiliates in
1996 consisted of a loss from Express of $177,000 and a loss from Mr. Payroll
of $148,000. As stated in Note 2, the Company obtained 100% ownership of Mr.
Payroll on December 31, 1996, therefore the 1997 operations of Mr. Payroll are
included in the Consolidated Financial Statements.
The Company's consolidated effective income tax rate decreased to 36%
in the second quarter of 1997, from 39% in the second quarter of 1996. The
domestic effective tax rate decreased to 38%, in 1997, from 43% in 1996,
primarily due to a foreign dividend tax credit of $114,000 received in the
second quarter of 1997. The effective tax rate for the Company's foreign
operations increased to 34% in the second quarter of 1997, from 33% in the
second quarter of 1996.
SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO THE
SIX MONTHS ENDED JUNE 30, 1996
RESULTS OF OPERATIONS
Finance and service charge revenues increased $7.1 million, or 16%, in
1997 over 1996, primarily due to a same unit increase in the average
outstanding amount of pawn loans of 16%, the impact of units in operation for
less than one year, and a slight decrease in the annualized yield from 1996 to
1997.
The consolidated annual loan yield, which represents a weighted
average of the distinctive yields realized in the three countries in which the
Company operates, decreased to 97% for the six month period in 1997, from 98%
for the same period in 1996. In its domestic operations, the annual loan yield
for the six months ended June 30, 1997 decreased to 127% from 128% for the same
period in 1996, due primarily to increased average loan balances for the
period. Internationally, the blended yield on average pawn loans outstanding
decreased to 54% for the six months ended June 30, 1997, from 56% for the
corresponding period in 1996. The decline in the
Page 12
<PAGE> 15
international yield resulted from a lower return on unredeemed collateral
disposed of at auction.
Proceeds from the disposition of merchandise increased $3 million, or
3%, during the first six months of 1997, over the first six months of 1996,
primarily due to a 4% increase in same unit dispositions that was partially
offset by a $2 million, or 24% decrease in proceeds from the disposition of
scrap jewelry.
The Company's margin on disposition of merchandise decreased to 36.1%
for the six months ended June 30, 1997, from 37.8% for the same period in 1996.
This decline in margin is due primarily to a much smaller margin on the
disposition of scrap jewelry compared to the same period in 1996, and the
Company's continued emphasis on faster disposition of merchandise. The lower
margin on the disposition of scrap jewelry in 1997 reflects a decline in the
price of gold. The merchandise turnover rate increased to 2.6 times in 1997 as
compared to 2.2 times for 1996.
Royalties and franchise fees revenue is generated from the Company's
check cashing operations. The revenue consists of franchise fees for new check
cashing franchises and royalties based on a percentage of check cashing fees
from existing franchise operations.
Operations and administration expense, as a percentage of net
revenues, was 71.4% for the first six months of 1997, compared to 70.4% for the
corresponding period in 1996. Total operations and administration cost
increased $6.4 million in the six months ended June 30, 1997, over the six
month period ended June 30, 1996. Domestic operations contributed $4.4 million
of the increase, due primarily to higher personnel and occupancy costs, with
foreign operations contributing $.4 million, and the consolidation of Mr.
Payroll adding $1.6 million.
Depreciation and amortization as a percentage of net revenues
decreased to 9.4% of net revenues in the six months ended June 30, 1997, from
10.3% in the same period in 1996, due to a moderation in the Company's
expansion during the past eighteen months.
Net interest expense, as a percentage of net revenues, increased to
6.5% in the first six months of 1997 from 6.1% in the first six months of 1996.
The dollar amount of interest expense increased by $.8 million, or 17%, due
primarily to additional debt incurred in the fourth quarter of 1996 to
repurchase 4.5 million shares of the Company's common stock. Average debt
outstanding increased 24% to $146.6 million in the six month period ended June
30, 1997 from $118.2 million for the same period in 1996. The Company's
effective rate of interest paid on its debt decreased to 7.6% for the first six
months of 1997 from 8.2% for the first six months of 1996.
Page 13
<PAGE> 16
Included in other expense for the six months ended June 30, 1997, is a
$175,000 loss from the Company's affiliate, Express. In the six months ended
June 30, 1996, the Company recorded $530,000 in losses from its two affiliates
(Express and Mr. Payroll). Of the $530,000 loss, Express had a loss of $291,000
and Mr. Payroll had a loss of $239,000. Effective December 31, 1996, the
Company acquired 100% ownership in Mr. Payroll therefore its 1997 operations
are included in the Consolidated Financial Statements.
The Company's consolidated effective income tax rate decreased to 37%
in the six months ended June 30, 1997, from 39% in the comparable period in
1996. The domestic effective tax rate decreased to 39%, in 1997, from 42% in
1996, due in part to a $114,000 foreign dividend tax credit received in the
second quarter of 1997. The Company's effective tax rate for the foreign
operations remained constant at 34% for 1997 and 1996, respectively.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash flow and liquidity, in management's opinion,
remains strong. Cash and cash equivalents increased $.7 million to $2.0 million
at June 30, 1997, from $1.3 million at December 31, 1996. The increase in cash
and cash equivalents in the first six months of 1997, was due to cash flows
from operating activities of $14.6 million, and borrowings of $7.3 million in
the bank lines of credit, proceeds from issuance of stock of $.7 million and
payments of $.2 million on notes receivable from stockholders. The funds
generated were used to fund $7.3 million of property and equipment purchases
(of which $2.6 million was expended for the development of Mr. Payroll's
automated check cashing system), to pay $4.3 million on current maturities of
long term debt, to acquire six new pawn units for $3.7 million, to purchase
$1.3 million of the Company's stock in open market transactions, to increase
pawn loans by $4.6 million, to extend advances to an affiliate of $.3 million
and to pay cash dividends of $.6 million.
The Company expects to continue its plan of adding approximately 10 to
15 new pawn units during the remainder of 1997, which would add approximately
30 units in 1997. These additions may occur through new openings or
acquisitions of existing locations. The Company also intends to invest in its
check cashing operations through its wholly owned subsidiary, Mr. Payroll.
On January 22, 1997, the Company announced that its Board of Directors
had authorized management to purchase up to one million shares of its common
stock in the open market. During the first six months of 1997, 119,900 shares
of the Company's common stock were repurchased and are now held as treasury
shares.
Management believes that borrowings available under its revolving
credit facilities, (described in note 3), cash generated from operations and
Page 14
<PAGE> 17
current working capital of $168 million should be sufficient to meet the
Company's anticipated future capital requirements.
IMPACT OF FOREIGN CURRENCY EXCHANGE RATES
The Company is subject to the risk of unexpected changes in foreign
currency rates by virtue of its operations in the United Kingdom and Sweden.
The Company's foreign assets, liabilities, and earnings are converted into U.S.
dollars in accordance with generally accepted accounting principles for
consolidation into the Company's financial statements. At June 30, 1997, the
Company had recorded a cumulative reduction to stockholder's equity of $1.98
million as a result of fluctuations in foreign currency exchange rates. Future
earnings and comparisons with prior periods reported by the Company may
fluctuate depending on applicable currency exchange rates in effect during the
periods.
Page 15
<PAGE> 18
DOMESTIC PAWN OPERATIONS
The following table sets forth selected financial data for the Company's
domestic pawn operations as of June 30, 1997 and 1996 and for the three months
then ended.
<TABLE>
<CAPTION>
1997 1996 Change
-------------- --------------- ---------------
($ in thousands)
<S> <C> <C> <C>
Finance and service charge revenues $19,312 $16,466 17%
Proceeds from disposition of merchandise 43,536 43,760 (1)%
-------------- --------------- ---------------
Total Revenues 62,848 60,226 4%
Cost of disposed merchandise 27,427 27,421 0%
-------------- --------------- ---------------
Net Revenues $35,421 $32,805 8%
-------------- --------------- ---------------
Other Data:
Annualized yield on loans 126% 128% (2)%
Average loan balance per
average location in operation $181 $157 15%
Average pawn loan amount at end of
period (not in thousands) $73 $70 4%
Margin on disposition of merchandise 37.0% 37.3% (1)%
Annualized merchandise turnover 2.4X 2.2X 9%
Average merchandise held for disposition
balance per average location $134 $151 (11)%
Expenses as a percentage of net revenues:
Operations and administration 75.5% 75.2% 0%
Depreciation and amortization 9.8% 11.5% (15)%
Interest, net 6.1% 4.8% 27%
Domestic Pawn Locations in Operation:
Beginning of period 337 329
Acquired 6 1
Established 6 --
Combined (2) --
-------------- ---------------
End of period 347 330 5%
============== =============== ===============
Average number of locations in
operation during the period (a) 341 329 4%
============== =============== ===============
</TABLE>
(a) Averages based on accumulation of month-end balances and dividing aggregate
total by total months in the period.
Page 16
<PAGE> 19
DOMESTIC PAWN OPERATIONS
The following table sets forth selected financial data for the Company's
domestic pawn operations as of June 30, 1997 and 1996 and for the six months
then ended.
<TABLE>
<CAPTION>
1997 1996 Change
-------------- --------------- ---------------
($ in thousands)
<S> <C> <C> <C>
Finance and service charge revenues $38,901 $32,976 18%
Proceeds from disposition of merchandise 93,347 90,464 3%
-------------- --------------- ---------------
Total Revenues 132,248 123,440 7%
Cost of disposed merchandise 59,632 56,257 6%
-------------- --------------- ---------------
Net Revenues $72,616 $67,183 8%
-------------- --------------- ---------------
Other Data:
Annualized yield on loans 127% 128% (1)%
Average loan balance per
average location in operation $183 $158 16%
Average pawn loan amount at end of
period (not in thousands) $73 $70 4%
Margin on disposition of merchandise 36.1% 37.8% (4)%
Annualized merchandise turnover 2.6X 2.2X 18%
Average merchandise held for disposition
balance per average location $139 $159 (13)%
Expenses as a percentage of net revenues:
Operations and administration 74.7% 74.3% 1%
Depreciation and amortization 9.9% 11.1% (11)%
Interest, net 6.0% 5.0% 20%
Domestic Pawn Locations in Operation:
Beginning of period 334 327
Acquired 6 1
Established 10 3
Combined (3) (1)
-------------- ---------------
End of period 347 330 5%
============== =============== ===============
Average number of locations in
operation during the period (a) 338 329 3%
============== =============== ===============
</TABLE>
(a) Averages based on accumulation of month-end balances and dividing aggregate
total by total months in the period.
Page 17
<PAGE> 20
FOREIGN PAWN OPERATIONS
The following tables set forth selected consolidated financial data
for Harvey & Thompson and Svensk Pantbelaning as of June 30, 1997, and 1996 and
for the three and six months period then ended.
Balance sheet data for Harvey & Thompson has been translated from
pounds sterling into U.S. dollars using the end of the period currency exchange
rate of 1.665 at June 30, 1997 and 1.553 at June 30, 1996. Income statement
data has been translated at an average exchange rate of 1.639 and 1.525 for the
three month periods ending June 30, 1997, and 1996, respectively.
Balance sheet data for Svensk Pantbelaning has been translated from
Swedish Kronor into U.S. dollars using the end of the period currency exchange
rate of 7.719 and 6.612 at June 30, 1997 and 1996 respectively. Income
statement data has been translated at an average exchange rate of 7.710 and
6.730 for the three months ended June 30, 1997, and 1996, respectively.
<TABLE>
<CAPTION>
Three Months Ended June 30,
1997 1996 Change
-------------- -------------- ------------
($ in thousands)
<S> <C> <C> <C>
Income Statement Data:
Total revenues $6,094 $5,701 7%
Net revenues 5,783 5,463 6%
Operating expenses 2,973 2,764 8%
Income from operations 2,810 2,699 4%
Other Data:
Annualized yield on loans 52% 57% (9)%
Average loan balance per
average location in operation $903 $824 10%
Average pawn loan amount at end of
period (not in thousands) $175 $173 1%
Ending loan balance $43,712 $39,395 11%
Expenses as a percentage of net revenues:
Operations and administration 46.0% 45.7% 1%
Depreciation and amortization 5.4% 4.9% 10%
Interest expense, net 9.8% 12.5% (22)%
Average number of locations in
operation during the period (a) 48 46 4%
</TABLE>
(a) Averages based on accumulation of month-end balances and dividing aggregate
total by total months in the period.
Page 18
<PAGE> 21
Income statement data for Harvey & Thompson for the six months ended
June 30 has been translated from British pounds sterling into U.S. dollars at
an average exchange rate of 1.636 for 1997, compared to 1.528 for 1996.
Income statement data for Svensk Pantbelaning has been translated from
Swedish Kronor into U.S. dollars at average exchange rates of 7.524 for 1997,
compared to 6.751 for 1996.
<TABLE>
<CAPTION>
Six Months Ended June 30,
1997 1996 Change
-------------- -------------- ------------
($ in thousands)
<S> <C> <C> <C>
Income Statement Data:
Total revenues $12,329 $11,027 12%
Net revenues 11,762 10,585 11%
Operating expenses 5,998 5,467 11%
Income from operations 5,764 5,118 13%
Other Data:
Annualized yield on loans 54% 56% (4)%
Average loan balance per
average location in operation $902 $803 12%
Expenses as a percentage of net revenues:
Operations and administration 45.6% 46.6% (2)%
Depreciation and amortization 5.3% 5.1% 4%
Interest expense, net 9.8% 13.2% (26)%
Average number of locations in
operation during the period (a) 48 46 4%
</TABLE>
(a) Averages based on accumulation of month-end balances and dividing aggregate
total by total months in the period.
CHECK CASHING OPERATIONS
The following table sets forth selected financial data for the
Company's check cashing operations for the three and six months ended June 30,
1997.
<TABLE>
<CAPTION>
Three Months Six Months
---------------- -----------------
($ in thousands)
<S> <C> <C>
Total revenues $477 $1,361
Operating expenses 931 1,831
------ ------
Loss from operations $(454) $(470)
====== ======
Number of franchised
check cashing locations 151 151
</TABLE>
The increase in the loss for the second quarter of 1997, over the
first quarter of 1997, is due primarily to a reduction in revenue. Revenue
levels declined in the second quarter as a result of lower check cashing fees,
and the royalties thereon, due to the fact that the processing of income tax
refund
Page 19
<PAGE> 22
checks occurs primarily in the first quarter. Also contributing to the revenue
decline were a reduction in the sale of check cashing franchises and the
closing of Mr. Payroll's three owned check cashing locations. During the first
half of 1997, the Company invested $2.6 million in the development of Mr.
Payroll's new automated check cashing system. Management anticipates that
marketing, development and operating costs will result in future losses from
check cashing operations until Mr. Payroll generates sufficient revenue from
its new automated check cashing system.
CAUTIONARY STATEMENT REGARDING RISKS AND UNCERTAINTIES
THAT MAY AFFECT FUTURE RESULTS
Certain portions of this report contain forward-looking statements
about the business, financial condition and prospects of the Company. The
actual results of the Company could differ materially from those indicated by
the forward-looking statements because of various risks and uncertainties
including, without limitation, changes in demand for the Company's services,
changes in competition, the ability of the Company to open new operating units
in accordance with its plans, economic conditions, real estate market
fluctuations, interest rate fluctuations, changes in the capital markets,
changes in tax and other laws and governmental rules and regulations applicable
to the Company's business, and other risks indicated in the Company's filings
with the Securities and Exchange Commission. These risks and uncertainties are
beyond the ability of the Company to control, and, in many cases, the Company
cannot predict all of the risks and uncertainties that could cause its actual
results to differ materially from those indicated by the forward-looking
statements. When used in this report, the words "believes," "estimates,"
"plans," "expects," "anticipates" and similar expressions as they relate to the
Company or its management are intended to identify forward-looking statements.
Page 20
<PAGE> 23
PART II
Item 1. LEGAL PROCEEDINGS
See Note 5 of Notes to Consolidated Financial Statements
Item 2. CHANGES IN SECURITIES
On August 5, 1997, the Board of Directors announced a dividend of one
common share purchase right payable to the holder of record of each share of
the Company's common stock outstanding as of the close of business on August
19, 1997, pursuant to a Rights Agreement between the Company and ChaseMellon
Shareholder Services, L.L.C., as Rights Agent. For a summary of the Rights, see
the Company's Form 8-A for the registration of the Rights, as filed with the
Securities and Exchange Commission on August 8, 1997.
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On April 22, 1997, the Company's Annual Meeting of Shareholders was
held. All of the nominees for director identified in the Company's Proxy
Statement, filed pursuant to Regulation 14A under the Securities Exchange Act
of 1934, were elected at the meeting to hold office until the next Annual
Meeting or until their successors are duly elected and qualified. The
shareholders ratified the Company's selection of independent auditors. The
shareholders voted on several proposed amendments to the Company's Articles of
Incorporation, none of which was adopted. There was no other business brought
before the meeting that required shareholder approval. Votes were cast in the
matters described below as follows (there were no broker non-votes in matters
(a) and (b) below):
(a) Election of directors
<TABLE>
<CAPTION>
For Withheld
--- --------
<S> <C> <C>
Jack R. Daugherty 20,868,633 1,400,028
A. R. Dike 20,868,321 1,400,340
Daniel R. Feehan 20,867,533 1,401,128
James H. Graves 20,803,617 1,465,044
B. D. Hunter 20,865,885 1,402,776
Timothy J. McKibben 20,804,011 1,464,650
Alfred J. Micallef 20,810,646 1,458,015
Carl P. Motheral 20,859,960 1,408,701
Samuel W. Rizzo 20,855,125 1,413,536
Rosalin Rogers 20,808,167 1,460,494
</TABLE>
Page 21
<PAGE> 24
(b) Ratification of Independent Auditors
For - 22,096,514
Against - 78,745
Abstain - 93,402
(c) Proposed amendments to Articles of Incorporation:
<TABLE>
<CAPTION>
Proposed
Amendment* For Against Abstain Broker Non-Votes
---------- --- ------- ------- ----------------
<S> <C> <C> <C> <C>
1. 7,150,267 11,530,880 50,700 5,498,122
2. 12,535,199 5,812,228 64,395 5,818,147
3. 5,462,652 12,859,085 90,085 5,818,147
4. 5,554,522 12,754,481 102,819 5,818,147
5. 6,447,852 11,854,839 109,131 5,818,147
</TABLE>
- --------------------
* - Proposed Amendments:
1. To provide for the classification of the board of directors into
three classes of directors with staggered terms.
2. To provide for a requirement that shareholders notify the
Company of a nomination prior to any meeting.
3. To provide for a limitation on who may call special meetings of
shareholders.
4. To provide for a minimum price and other matters, or a higher
voting requirement, in connection with certain business
combinations.
5. To provide for preferred stock in the Company's authorized
capital stock.
Item 5. OTHER INFORMATION
Not Applicable
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.1 - Amendment to 1987 Stock Option Plan (With Stock
Appreciation Rights) dated April 22,1997
27 - Financial Data Schedule
(b) Reports on Form 8-K
The Company filed a Current Report on Form 8-K dated August
5, 1997 reporting the planned issuance of common share
purchase rights to shareholders of record as of the close
of business on August 19, 1997.
Page 22
<PAGE> 25
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/ Thomas A. Bessant, Jr.
---------------------------------------------------
Thomas A. Bessant, Jr.
Senior Vice President and
Chief Financial Officer
Date: August 13, 1997
Page 23
<PAGE> 26
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
10.1 Amendment to 1987 Stock Option Plan (With Stock Appreciation
Rights) dated April 22,1997
27 Financial Data Schedule
</TABLE>
<PAGE> 1
EXHIBIT 10.1
AMENDMENT FOUR
TO THE
1987 STOCK OPTION PLAN
(WITH STOCK APPRECIATION RIGHTS)
FOR
CASH AMERICA INTERNATIONAL, INC.
By action of the Board of Directors of Cash America International, Inc.
this day, the 1987 Stock Option Plan (With Stock Appreciation Rights) for Cash
America International, Inc. (the "Plan") is hereby amended as follows:
Section 21 of the Plan is hereby amended to read as follows:
21. Effective Date and Termination Date. The effective date of the
Plan is the date on which the Board adopts this Plan, unless
otherwise provided by the Board at the time of such adoption, and
the Plan shall terminate on the eleventh anniversary of the
effective date.
CASH AMERICA INTERNATIONAL, INC.
By: /s/ HUGH A. SIMPSON
-----------------------------------
Hugh A. Simpson, Vice President
- General
Counsel and Secretary
April 22, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,994
<SECURITIES> 0
<RECEIVABLES> 125,763
<ALLOWANCES> 0
<INVENTORY> 47,233
<CURRENT-ASSETS> 191,628
<PP&E> 114,429
<DEPRECIATION> 50,856
<TOTAL-ASSETS> 327,891
<CURRENT-LIABILITIES> 23,760
<BONDS> 145,877
0
0
<COMMON> 3,024
<OTHER-SE> 155,230
<TOTAL-LIABILITY-AND-EQUITY> 327,891
<SALES> 94,139
<TOTAL-REVENUES> 145,938
<CGS> 60,199
<TOTAL-COSTS> 110,118
<OTHER-EXPENSES> 19,305
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,557
<INCOME-PRETAX> 10,807
<INCOME-TAX> 4,006
<INCOME-CONTINUING> 6,801
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,801
<EPS-PRIMARY> 0.27
<EPS-DILUTED> 0.27
</TABLE>
