<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 March 31, 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:
24,197,044 common shares, $.10 par value, were outstanding as of April 30, 1997
===============================================================================
<PAGE> 2
CASH AMERICA INTERNATIONAL, INC.
INDEX TO 10-Q
<TABLE>
<CAPTION>
PART I. FINANCIAL STATEMENTS
Page
<S> <C>
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets - March 31, 1997
and 1996 and December 31, 1996...............................1
Consolidated Statements of Income - Three Months
Ended March 31, 1997 and 1996................................2
Consolidated Statements of Stockholders' Equity -
Three Months Ended March 31, 1997 and 1996...................3
Consolidated Statements of Cash Flows -
Three Months Ended March 31, 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.........................................16
SIGNATURE...........................................................17
</TABLE>
<PAGE> 3
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
(UNAUDITED)
March 31 December 31
1997 1996 1996
---------- ---------- ----------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,771 $ 3,919 $ 1,334
Loans 101,732 85,475 107,679
Merchandise held for disposition, net 45,455 51,871 48,777
Finance and service charges receivable 14,325 10,923 15,248
Prepaid expenses and other 5,586 5,044 5,293
Deferred tax asset 11,034 11,120 11,643
---------- ---------- ----------
Total current assets 179,903 168,352 189,974
Property and equipment, net 61,833 63,217 62,818
Intangible assets, net 64,351 62,518 66,065
Other assets 6,469 9,185 6,225
---------- ---------- ----------
Total assets $ 312,556 $ 303,272 $ 325,082
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 11,600 $ 8,815 $ 13,959
Customer deposits 3,567 3,940 2,955
Income taxes currently payable 4,183 1,170 3,776
Current portion of long-term debt 4,286 4,286
---------- ---------- ----------
Total current liabilities 23,636 13,925 24,976
Long-term debt:
Bank lines of credit 87,935 61,949 100,365
Notes payable, net of current portion 45,714 50,000 45,714
---------- ---------- ----------
133,649 111,949 146,079
Stockholders' equity:
Common stock, $.10 par value per
share, 80,000,000 shares authorized 3,024 3,024 3,024
Paid in surplus 121,891 121,861 121,878
Retained earnings 79,460 64,578 75,973
Notes receivable - stockholders (954) (1,071) (1,065)
Foreign currency translation adjustment (2,505) (4,304) (386)
---------- ---------- ----------
200,916 184,088 199,424
Less - shares held in treasury, at cost (45,645) (6,690) (45,397)
---------- ---------- ----------
Total stockholders' equity 155,271 177,398 154,027
---------- ---------- ----------
Total liabilities and stockholders' equity $ 312,556 $ 303,272 $ 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
March 31
-------------------------
1997 1996
<S> <C> <C>
REVENUES
Finance and service charge revenues $ 25,471 $ 21,536
Proceeds from disposition of merchandise 50,164 47,004
Royalties and franchise fees 884 --
---------- ----------
TOTAL REVENUES 76,519 68,540
Cost of disposed merchandise 32,461 29,040
---------- ----------
NET REVENUES 44,058 39,500
---------- ----------
OPERATING EXPENSES
Operations 25,241 22,845
Administration 5,742 4,795
Amortization 881 856
Depreciation 3,261 3,105
---------- ----------
Total operating expenses 35,125 31,601
---------- ----------
INCOME FROM OPERATIONS 8,933 7,899
Interest expense, net 2,806 2,492
Other expense 58 182
---------- ----------
INCOME BEFORE INCOME TAXES 6,069 5,225
Provision for income taxes 2,279 2,015
---------- ----------
NET INCOME $ 3,790 $ 3,210
========== ==========
Earnings per share - Fully diluted $ 0.15 $ 0.11
Weighted average shares - Fully diluted 25,020 28,740
</TABLE>
See notes to consolidated financial statements.
Page 2
<PAGE> 5
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Three Months Ended March 31, 1997 and 1996
(In thousands, except share data)
(UNAUDITED)
<TABLE>
<CAPTION>
NOTES FOREIGN
COMMON STOCK TREASURY STOCK RECEIVABLE CURRENCY
------------------- PAID IN RETAINED ------------------- STOCK- TRANSLATION
SHARES AMOUNT SURPLUS EARNINGS SHARES AMOUNT HOLDERS ADJUSTMENT TOTAL
---------- ------- -------- -------- --------- -------- ------- ---------- -----
Balance at
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
December 31, 1996 30,235,164 $ 3,024 $121,878 $ 75,973 5,975,670 $(45,397) $(1,065) $ (386) $154,027
Net income 3,790 3,790
Dividends declared (303) (303)
Treasury shares acquired 51,100 (458) (458)
Treasury shares reissued (2) (27,650) 210 208
Tax benefit from exercise
of option shares 15 15
Reduction in stockholders
notes receivable 111 111
Foreign currency
translation adjustment (2,119) (2,119)
---------- ------- -------- -------- --------- -------- ------ ------- --------
Balance at
March 31, 1997 30,235,164 $ 3,024 $121,891 $ 79,460 5,999,120 $(45,645) $(954) $(2,505) $155,271
========== ======= ======== ======== ========= ======== ====== ======= ========
Balance at
December 31, 1995 30,235,164 $ 3,024 $121,840 $ 61,727 1,495,285 $ (6,734) $(1,071) $(3,834) $174,952
Net income 3,210 3,210
Dividends declared (359) (359)
Treasury shares reissued 10 (9,681) 44 54
Tax benefit from exercise
of option shares 11 11
Foreign currency
translation adjustment (470) (470)
---------- ------- -------- -------- --------- -------- ------ ------- --------
Balance at
March 31, 1996 30,235,164 $ 3,024 $121,861 $ 64,578 1,485,604 $ (6,690) $(1,071) $(4,304) $177,398
========== ======= ======== ======== ========= ======== ====== ======= ========
</TABLE>
See notes to consolidated financial statements.
Page 3
<PAGE> 6
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
(UNAUDITED)
Three Months Ended
March 31
----------- -----------
1997 1996
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Reconciliation of Net Income to Net Cash
Provided By Operating Activities:
Net income $ 3,790 $ 3,210
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization 881 856
Depreciation 3,261 3,105
Decrease in finance and service charges receivable 465 828
Decrease in merchandise held for disposition 3,309 4,772
Increase in prepaid expenses and other (158) (181)
Decrease in accounts payable and
accrued expenses (2,385) (725)
Increase in layaway deposits, net 612 416
Increase (decrease) in income taxes payable 519 (1,203)
Deferred taxes 229 1,335
----------- -----------
Net cash provided by operating activities 10,523 12,413
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Loans forfeited and transferred to merchandise held for disposition 27,016 22,265
Loans repaid or renewed 68,347 63,195
Loans made, including loans renewed (92,710) (83,639)
----------- -----------
Net decrease in loans 2,653 1,821
Net payments from (advances to) affiliates 50 (850)
Purchases of property and equipment (2,543) (1,393)
----------- -----------
Net cash provided (used) by investing activities 160 (422)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net payments under bank lines of credit (9,697) (11,131)
Net payments on notes receivable stockholders 111 --
Proceeds from issuance of stock, net 208 54
Treasury shares acquired (458) --
Dividends paid (303) (359)
----------- -----------
Net cash used by financing activities (10,139) (11,436)
----------- -----------
EFFECT OF EXCHANGE RATE CHANGES ON CASH (107) (71)
----------- -----------
INCREASE IN CASH AND CASH EQUIVALENTS 437 484
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,334 3,435
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,771 $ 3,919
=========== ===========
</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 3).
The financial statements as of March 31, 1997 and 1996 and for the
three 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 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 ended March 31, 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 March 31, 1997, Express had borrowings outstanding of
$2,350,000. 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 March 31 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 $ 61,850 $ 32,700
U.K. Line of Credit up to(pound)5 million
due April 30, 1998 1,392 1,832
Swedish Line of Credit up to SEK 10 million
due June 30, 1998 187 --
Swedish Kronor term loan
due September 30, 1998 24,506 27,417
8.33% senior unsecured notes due 2003 30,000 30,000
8.14% senior unsecured notes due 2007 20,000 20,000
---------- ----------
137,935 111,949
Less current portion 4,286 --
---------- ----------
Total Long-Term Debt $ 133,649 $ 111,949
========== ==========
</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 March 31, 1997, the Company has the
option of borrowing at LIBOR plus 75 basis points. The Company has an interest
rate cap agreement that expires on May 5, 1997, that limits the maximum LIBOR
interest rate to 7% on $20,000,000 of debt. 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 an additional
$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%.
Interest is payable on the Swedish Term Loan 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 $15,730,000 as of March 31, 1997) at 10.92% through August 17,
1998. The effective rate of interest under the loan at March 31, 1997, was
8.91% after taking into account the interest rate exchange agreement.
Page 6
<PAGE> 9
NOTE 4 - LITIGATION
The Company is a defendant in certain lawsuits encountered in the
ordinary course of its business. In the opinion of management, the resolution
of these matters will not have a material adverse effect on the Company's
financial position or results of operations.
Page 7
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
SUMMARY CONSOLIDATED FINANCIAL DATA
FIRST QUARTER ENDED MARCH 31, 1997 vs.
FIRST QUARTER ENDED MARCH 31, 1996
The following table sets forth selected unaudited, consolidated financial
data with respect to the Company for the three months ended March 31, 1997 and
1996.
<TABLE>
<CAPTION>
1997 1996 Change
-------- -------- --------
($ in thousands)
<S> <C> <C> <C>
Finance and service charge revenues $ 25,471 $ 21,536 18%
Proceeds from disposition of merchandise 50,164 47,004 7%
Royalties and franchise fees 884
-------- -------- --------
Total Revenues 76,519 68,540 12%
Cost of disposed merchandise 32,461 29,040 12%
-------- -------- --------
Net Revenues $ 44,058 $ 39,500 12%
-------- -------- --------
Other Data:
Annualized yield on loans 99% 99% 0%
Average loan balance per
average location in operation $ 273 $ 234 17%
Average pawn loan amount at end of
period (not in thousands) $ 99 $ 94 5%
Margin on disposition of merchandise 35.3% 38.2% (8)%
Average annualized merchandise turnover 2.7X 2.1X 29%
Average merchandise held for disposition
balance per average location $ 125 $ 148 (16)%
Expenses as a percentage of net revenues:
Operations and administration 70.3% 70.0% 0%
Depreciation and amortization 9.4% 10.0% (6)%
Interest, net 6.4% 6.3% 2%
Pawn Locations in Operation:
Beginning of period 382 373
Acquired -- --
Established 4 3
Combined (1) (2)
-------- --------
End of period 385 374 3%
======== ======== ========
Average number of locations in
operation during the period (a) 383 374 2%
======== ======== ========
</TABLE>
(a) Averages based on accumulation of month-end balances and dividing
aggregate total by total months in the period.
Page 8
<PAGE> 11
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 the making of pawn loans is finance
and service charge revenues. 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 15-month period
from December 31, 1995 through March 31, 1997 with the addition of 12
locations. Twelve locations were established, six operating units were
acquired, and six locations were combined for a net addition of twelve pawn
operating units. At March 31, 1997, the Company operated 385 pawn units--337 in
14 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
first quarter of 1997 includes 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.
FIRST QUARTER ENDED MARCH 31, 1997 COMPARED TO THE
FIRST QUARTER ENDED MARCH 31, 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 $3.9 million, or 18%, in
the first quarter of 1997 over the first quarter of 1996 because of a same unit
increase in the average outstanding amount of pawn loans of 16%, combined with
the impact of units in operation for less than one year. A 14% increase in the
number of outstanding pawn loans as of March 31, 1997, compared to March 31,
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, remained constant at 99% for both periods. In its domestic
operations, the Company realized a slight increase in its loan yield
Page 9
<PAGE> 12
to 130% for the first quarter of 1997, compared to 129% for the first quarter
of 1996. The Company believes its continued emphasis on maximizing cash returns
on capital employed contributed to the increase. Internationally, the blended
yield on average pawn loans outstanding decreased to 55% for the first quarter
of 1997 from 56% for the same period in 1996. The slight decline resulted from
a lower return on unredeemed collateral disposed of at auction.
Pawn loans outstanding decreased 6% in the first quarter of 1997 from
the balance at December 31, 1996, compared to a 3% decline in the first quarter
of 1996 from the balance at December 31, 1995. Historically, the Company's
domestic pawn loans decrease during the first quarter when the Internal Revenue
Service processes federal income tax refunds. The Company believes that many
customers use a portion of their refund to repay or extend their loans and
purchase items of personal property. The Company believes that the slightly
higher rate of decrease for its domestic operations is due, in part, to higher
average tax refunds. The majority of the consolidated rate of decrease is due
to the strengthening of the U.S. dollar against the pounds sterling and the
Swedish Kronor during the first quarter of 1997.
Proceeds from the disposition of merchandise increased $3.2 million,
or 7%, in the first quarter of 1997 over the first quarter of 1996, primarily
due to a 6% gain from same units (those in operation more than one year). The
Company believes that higher average tax refunds contributed to the increase,
along with a continued emphasis on increasing the merchandise turnover rate.
The Company's margin on disposition of merchandise decreased to 35.3%
in the first quarter of 1997, as compared to 38.2% for the first quarter of
1996. This decline in margin is due primarily to a much smaller margin on the
disposition of scrap jewelry during the first quarter of 1997, compared to the
same period of 1996, and the Company's continued emphasis on faster disposition
of merchandise. Excluding the disposition of scrap jewelry, the margin in the
first quarter of 1997 was 37.4%, compared to 39.3% for the first quarter of
1996. The merchandise turnover rate increased to 2.7 times for 1997 as compared
to 2.1 times for 1996. During the first quarter of 1996, the Company introduced
a new incentive compensation program for its field operations personnel with a
focus of rewarding the maximization of cash returns on capital employed. This
program was in effect for the full quarter in 1997 versus a portion of the
quarter in 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 70% in the first quarter of 1997 and 1996, respectively. Total
Page 10
<PAGE> 13
operations and administration expense increased $3.3 million in the first
quarter of 1997, representing a 12% increase over the first quarter of 1996.
Domestic operations contributed $2.3 million of the increase, due primarily to
personnel and occupancy costs, with foreign operations contributing $.3
million, and the consolidation of Mr. Payroll added $.8 million to the increase.
Depreciation and amortization as a percentage of net revenues
decreased to 9.4% in the first quarter of 1997, from 10% in the first quarter
of 1996, due to a moderation in the Company's expansion during the past fifteen
months.
Net interest expense, as a percentage of net revenues, increased
slightly to 6.4% in the first quarter of 1997 from 6.3% in the first quarter of
1996. The dollar amount of interest expense increased by $.3 million, or 13%,
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 21% to $147.6 million for the first quarter of 1997 as
compared to $122.2 million for the first quarter of 1996. The Company's
effective rate of interest paid on its debt decreased to 7.7% for the first
quarter of 1997 from 8.2% for the first quarter of 1996.
Included in other expense for the first quarter of 1997, is a $51,000
loss from an affiliate. The Company recorded $205,000 in losses from affiliates
in the first quarter of 1996.
The Company's consolidated effective income tax rate decreased to 38%
in the first quarter of 1997, from 39% in the first quarter of 1996. The
domestic effective tax rate decreased to 40%, in 1997, from 41% in 1996, while
the effective tax rate in the Company's foreign operations remained constant at
34% for the first quarter of 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 $.4 million to $1.8 million
at the end of the first quarter of 1997, from $1.3 million at December 31,
1996. The increase in cash and cash equivalents in the first three months of
1997, was primarily due to cash flow from operating activities of $10.5
million, and a net decrease in loans of $2.7 million. These cash increases were
partially offset by repayments of long-term debt of $9.7 million, capital
expenditures of $2.5 million, repurchases of the Company's common stock in open
market transactions of $.5 million and cash payments of dividends of $.3
million.
The Company intends to continue its plan of adding approximately 20 to
30 new pawn units, through new openings or acquisitions of existing locations.
The Company also intends to expand its check cashing operations through its
wholly owned subsidiary, Mr. Payroll Corporation.
Page 11
<PAGE> 14
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 quarter of 1997, 51,100 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
current working capital of $156 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 March 31, 1997, the
Company had recorded a cumulative reduction to stockholder's equity of $2.5
million as a result of fluctuations in foreign currency exchange rates. Future
earnings and comparisons with prior periods reported by the Company may
fluctuate depending on applicable currency exchange rates in effect during the
periods.
Page 12
<PAGE> 15
DOMESTIC PAWN OPERATIONS
The following table sets forth selected financial data for the Company's
domestic pawn operations as of March 31, 1997 and 1996 and for the three months
then ended.
<TABLE>
<CAPTION>
1997 1996 Change
-------- -------- --------
($ in thousands)
<S> <C> <C> <C>
Finance and service charge revenues $ 19,589 $ 16,510 19%
Proceeds from disposition of merchandise 49,811 46,704 7%
-------- -------- --------
Total Revenues 69,400 63,214 10%
Cost of disposed merchandise 32,205 28,836 12%
-------- -------- --------
Net Revenues $ 37,195 $ 34,378 8%
-------- -------- --------
Other Data:
Annualized yield on loans 130% 129% 1%
Average loan balance per
average location in operation $ 182 $ 157 16%
Average pawn loan amount at end of
period (not in thousands) $ 74 $ 71 4%
Margin on disposition of merchandise 35.3% 38.3% (8)%
Annualized merchandise turnover 2.7X 2.1X 29%
Average merchandise held for disposition
balance per average location $ 142 $ 168 (15)%
Expenses as a percentage of net revenues:
Operations 60.9% 61.2% 0%
Administration 13.0% 12.1% 7%
Depreciation and amortization 10.0% 10.7% (7)%
Interest, net 5.9% 5.2% 13%
Domestic Pawn Locations in Operation:
Beginning of period 334 327
Acquired -- --
Established 4 3
Combined (1) (1)
-------- --------
End of period 337 329 2%
======== ======== ========
Average number of locations in
operation during the period (a) 335 328 2%
======== ======== ========
</TABLE>
(a) Averages based on accumulation of month-end balances and dividing
aggregate total by total months in the period.
Page 13
<PAGE> 16
FOREIGN PAWN OPERATIONS
The following table sets forth selected consolidated financial data
for Harvey & Thompson and Svensk Pantbelaning as of March 31, 1997, and 1996
and for the three month 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 1.637 at March 31, 1997 and 1.527 at March 31, 1996. Income statement
data has been translated at an average exchange rate of 1.634 and 1.532 for the
three month periods ending March 31, 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 7.549 and 6.748 at March 31, 1997 and 1996 respectively. Income
statement data has been translated at an average exchange rate of 7.351 and
6.776 for the three months ended March 31, 1997, and 1996, respectively.
<TABLE>
<CAPTION>
Three Months Ended March 31,
1997 1996 Change
---------- ---------- ---------
($ in thousands)
<S> <C> <C> <C>
Income Statement Data:
Total revenues $ 6,235 $ 5,326 17%
Net revenues 5,979 5,122 17%
Operating expenses 3,025 2,703 12%
Income from operations 2,954 2,419 22%
Other Data:
Annualized yield on loans 55% 56% (2)%
Average loan balance per
average location in operation $ 902 $ 783 15%
Average pawn loan amount at end of
period (not in thousands) $ 176 $ 169 4%
Ending loan balance $ 43,427 $ 37,067 17%
Expenses as a percentage of net revenues:
Operations 34.9% 35.4% (1)%
Administration 10.4% 12.1% (14)%
Depreciation and amortization 5.3% 5.3% 0%
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 14
<PAGE> 17
CHECK CASHING OPERATIONS
The following table sets forth selected financial data for the
Company's check cashing operations for the three months ended March 31, 1997.
<TABLE>
<CAPTION>
1997
----------
<S> <C>
Total revenues $884
Operating expenses 900
==========
Loss from operations $ (16)
==========
Number of franchised
check cashing locations 150
</TABLE>
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 15
<PAGE> 18
PART II
Item 1. LEGAL PROCEEDINGS
See Note 5 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
Not Applicable
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K - None
Page 16
<PAGE> 19
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/ James H. Kauffman
---------------------------------------------------
James H. Kauffman
Executive Vice President and
Chief Financial Officer
Date: May 13, 1997
Page 17
<PAGE> 20
INDEX TO EXHIBITS
EXHIBIT
NO. ITEM
------- ----
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 1,771
<SECURITIES> 0
<RECEIVABLES> 116,057
<ALLOWANCES> 0
<INVENTORY> 45,455
<CURRENT-ASSETS> 179,903
<PP&E> 109,912
<DEPRECIATION> 48,079
<TOTAL-ASSETS> 312,556
<CURRENT-LIABILITIES> 23,636
<BONDS> 133,649
0
0
<COMMON> 3,024
<OTHER-SE> 152,247
<TOTAL-LIABILITY-AND-EQUITY> 312,556
<SALES> 50,164
<TOTAL-REVENUES> 76,519
<CGS> 32,461
<TOTAL-COSTS> 57,702
<OTHER-EXPENSES> 9,884
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,806
<INCOME-PRETAX> 6,069
<INCOME-TAX> 2,279
<INCOME-CONTINUING> 3,790
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,790
<EPS-PRIMARY> 0.15
<EPS-DILUTED> 0.15
</TABLE>
