Cash America reports 4Q results

Payday lender and pawn shop operator Cash America International Inc. reported Jan. 23 net income in its fourth quarter ended Dec. 31, 2013, was $27,284,000 (91 cents per share), which included the after-tax impact of unusual expense items of $2.8 million (10 cents per share). This compares with $24,480,000 (79 cents per share) for the fourth quarter ended 2012, which included the after-tax impact of unusual expense items of $15.4 million (50 cents per share). The unusual expense items included costs related to the closure of 28 locations in Texas, which offered unsecured consumer loans as the primary source of revenue, a regulatory penalty incurred during the period, an adjustment to the remaining expected liability for the voluntary refund to customers in Ohio and expenses related to the early extinguishment of debt. Excluding the effect of these expenses, fourth quarter 2013 adjusted net income attributable to the Fort Worth-based company would have been $30.1 million, or $1.01 per share. During the fourth quarter of 2012, the company incurred unusual expense items related to a voluntary refund to customers in Ohio and the reorganization of its Mexico-based pawn lending business, including the closure of 115 locations in Mexico, which totaled $15.4 million after taxes (50 cents per share). Excluding these expenses, adjusted net income for the fourth quarter of 2012 would have been $39,887,000, or $1.29 per share. The company said consolidated net revenue in the fourth quarter of 2013 was up 2 percent to $271.6 million compared with $267.1 million in the fourth quarter of 2012. The increase in net revenue was due to a 10 percent increase in net consumer loan fees after loan loss provision expense and a 6 percent increase in revenue from secured loans during the quarter, the combination of which offset the anticipated decrease in net proceeds from the sale of merchandise. Commenting on the results of the quarter, Daniel R. Feehan, president and chief executive officer, said, “As we expected, the retail selling environment during the fourth quarter was very competitive, but we were able to move merchandise during the period while benefiting from increased revenue from our loan products. We also completed the previously announced acquisition of a 34-store chain of pawn lending locations during the fourth quarter, which helped us achieve adjusted earnings that were in line with our expectations as we entered the quarter.” Total revenue for the fiscal year ended Dec. 31, 2013, was $1.8 billion, compared with $1.8 billion in 2012. Net income for the 12 months was $142,528,000 ($4.66 per share), which includes a net benefit from unusual items during the year of $18.8 million (a benefit of 62 cents per share). The company said it believes that the opportunities for sustained growth in revenue and earnings will be largely associated with the customer demand for its credit products, which primarily take the form of pawn loans and consumer loans. Other elements expected to affect the growth in revenue include the potential impact of the regulatory governance of consumer loan products, the ability to profitably liquidate merchandise primarily from unredeemed pawn loans, the continued development of the Mexican pawn operations and the rate of growth of the Company’s e-commerce segment. Cash America estimates earnings per share in the first quarter of 2014 will be between $1.15 and $1.25 compared with $1.40 in the first quarter of 2013. The company confirmed its previously reported expectations for fiscal year 2014 of earnings per share between $4.20 to $4.40, compared to 2013 earnings per share of $4.66, which included the unusual items totaling $18.8 million. As of Dec. 31, 2013, Cash America International Inc. operated 1,006 total locations, including: 869 lending locations in 22 states in the United States primarily under the names “Cash America Pawn,” “SuperPawn,” “Cash America Payday Advance,” and “Cashland;” 47 pawn lending locations in central and southern Mexico under the name “Cash America casa de empeño;” and 90 check cashing centers operating in 14 states in the U.S. under the name “Mr. Payroll.” Additionally, the company offered consumer loans over the Internet to customers in 32 states in the U.S., and in the United Kingdom, Australia and Canada.