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UNITED STATES
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, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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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:
24,530,234 common shares, $.10 par value, were outstanding as of May 3, 2002
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CASH AMERICA INTERNATIONAL, INC.
INDEX TO FORM 10-Q
PART I. FINANCIAL STATEMENTS
Page
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets - March 31, 2002
and 2001 and December 31, 2001....................................... 1
Consolidated Statements of Operations -
Three Months Ended March 31, 2002 and 2001........................... 2
Consolidated Statements of Stockholders' Equity -
Three Months Ended March 31, 2002 and 2001........................... 3
Consolidated Statements of Cash Flows -
Three Months Ended March 31, 2002 and 2001........................... 4
Notes to Consolidated Financial Statements........................... 5
Item 2. Management's Discussion and Analysis of
Results of Operations and Financial Condition.............. 11
PART II. OTHER INFORMATION..................................................... 21
SIGNATURES...................................................................... 22
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data) (UNAUDITED)
March 31, December 31,
2002 2001 2001
----------- ----------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 7,293 $ 6,262 $ 6,394
Loans 105,603 107,493 116,590
Merchandise held for disposition, net 55,101 52,308 63,392
Finance and service charges receivable 17,403 17,710 19,396
Other receivables and prepaid expenses 7,674 6,872 7,992
Income taxes recoverable -- 1,183 --
Deferred tax assets 7,437 4,823 7,795
Net current assets of discontinued operations 3,175 5,016 3,008
----------- ----------- ------------
Total current assets 203,686 201,667 224,567
Property and equipment, net 67,302 50,126 68,450
Goodwill 77,058 78,100 76,686
Intangible assets, net 874 1,431 981
Other assets 4,685 5,090 4,762
Deferred tax assets 1,470 -- 1,846
Net non-current assets of discontinued operations 5,424 22,216 5,598
----------- ----------- ------------
Total assets $ 360,499 $ 358,630 $ 382,890
=========== =========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 17,182 $ 18,737 $ 27,939
Customer deposits 4,542 4,363 3,961
Reserve for disposal of discontinued operations 7,722 -- 7,953
Income taxes currently payable 2,752 433 1,123
Current portion of long-term debt 8,671 10,165 9,020
----------- ----------- ------------
Total current liabilities 40,869 33,698 49,996
Deferred tax liabilities 1,699 2,652 1,701
Long-term debt 146,388 144,661 162,762
----------- ----------- ------------
Stockholders' equity:
Common stock, $.10 par value per
share, 80,000,000 shares authorized 3,024 3,024 3,024
Paid in surplus 127,821 127,815 127,821
Retained earnings 100,088 104,697 95,192
Accumulated other comprehensive loss (11,630) (11,993) (10,820)
Notes receivable - stockholders (5,890) (5,570) (5,890)
----------- ----------- ------------
213,413 217,973 209,327
Less -- shares held in treasury, at cost (41,870) (40,354) (40,896)
----------- ----------- ------------
Total stockholders' equity 171,543 177,619 168,431
----------- ----------- ------------
Total liabilities and stockholders' equity $ 360,499 $ 358,630 $ 382,890
=========== =========== ============
See notes to consolidated financial statements.
Page 1
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data) (UNAUDITED)
Three Months Ended
March 31,
2002 2001
---------- ----------
REVENUE
Finance and service charges $ 28,820 $ 28,965
Proceeds from disposition of merchandise 67,034 62,784
Cash advance fees 3,562 625
Check cashing royalties and fees 1,304 1,182
---------- ----------
TOTAL REVENUE 100,720 93,556
---------- ----------
COSTS OF REVENUE
Disposed merchandise 43,881 41,428
---------- ----------
NET REVENUE 56,839 52,128
========== ==========
OPERATING EXPENSES
Lending operations 34,006 32,135
Cash advance loss provision 901 219
Check cashing operations 439 314
Administration 7,497 6,581
Depreciation and amortization 3,586 4,240
---------- ----------
Total operating expenses 46,429 43,489
---------- ----------
INCOME FROM OPERATIONS 10,410 8,639
Interest expense, net 2,243 2,838
Loss from derivative valuation fluctuations 36 472
---------- ----------
Income from continuing operations before income taxes 8,131 5,329
Provision for income taxes 2,928 2,096
---------- ----------
INCOME FROM CONTINUING OPERATIONS 5,203 3,233
Loss from discontinued operations -- (558)
---------- ----------
NET INCOME $ 5,203 $ 2,675
========== ==========
Net income per share:
Basic--
Income from continuing operations $ .21 $ .13
Loss from discontinued operations -- (.02)
Net income $ .21 $ .11
Diluted--
Income from continuing operations $ .21 $ .13
Loss from discontinued operations -- (.02)
Net income $ .21 $ .11
---------- ----------
Weighted average common shares outstanding:
Basic 24,521 24,653
Diluted 24,862 24,719
========== ==========
See notes to consolidated financial statements.
Page 2
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31, 2002 AND 2001
(In thousands, except share data) (UNAUDITED)
COMMON STOCK
------------------- PAID IN RETAINED COMPREHENSIVE
SHARES AMOUNT SURPLUS EARNINGS INCOME (LOSS)
----------- ------ --------- -------- -------------
Balance at
December 31, 2001 30,235,164 $3,024 $ 127,821 $ 95,192
Comprehensive income:
Net income 5,203 $ 5,203
Other comprehensive
loss - Foreign
currency translation
adjustments (810)
-------------
Comprehensive income $ 4,393
-------------
Dividends declared--
$.0125 per share (307)
Treasury shares purchased
----------- ------ --------- -------- -------------
Balance at
March 31, 2002 30,235,164 $3,024 $ 127,821 $100,088
=========== ====== ========= ======== =============
Balance at
December 31, 2000 30,235,164 $3,024 $ 127,820 $102,326
Comprehensive loss:
Net income 2,675 $ 2,675
Other comprehensive
loss - Foreign
currency translation
adjustments (3,506)
-------------
Comprehensive loss $ (831)
-------------
Dividends declared--
$.0125 per share (304)
Treasury shares purchased
Treasury shares reissued (5)
Change in notes
receivable -
stockholders
----------- ------ --------- -------- -------------
Balance at
March 31, 2001 30,235,164 $3,024 $ 127,815 $104,697
=========== ====== ========= ======== =============
ACCUMULATED NOTES
OTHER RECEIVABLE - TREASURY STOCK
COMPREHENSIVE STOCK- ----------------------
INCOME (LOSS) HOLDERS SHARES AMOUNT
------------- ----------- ---------- ----------
Balance at
December 31, 2001 $ (10,820) $ (5,890) 5,643,318 $ (40,896)
Comprehensive income:
Net income
Other comprehensive
loss - Foreign
currency translation
adjustments (810)
Comprehensive income
Dividends declared--
$.0125 per share
Treasury shares purchased 136,599 (974)
------------- ----------- ---------- ----------
Balance at
March 31, 2002 $ (11,630) $ (5,890) 5,779,917 $ (41,870)
============= =========== ========== ==========
Balance at
December 31, 2000 $ (8,487) $ (5,755) 5,577,318 $ (40,470)
Comprehensive loss:
Net income
Other comprehensive
loss - Foreign
currency translation
adjustments (3,506)
Comprehensive loss
Dividends declared--
$.0125 per share
Treasury shares purchased (1,590) 70
Treasury shares reissued (6,250) 46
Change in notes
receivable -
stockholders 185
------------- ----------- ---------- ----------
Balance at
March 31, 2001 $ (11,993) $ (5,570) 5,569,478 $ (40,354)
============= =========== ========== ==========
See notes to consolidated financial statements.
Page 3
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (UNAUDITED)
Three Months Ended
March 31,
2002 2001
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 5,203 $ 2,675
Less: Loss from discontinued operations -- (558)
---------- ----------
Income from continuing operations 5,203 3,233
Adjustments to reconcile income from continuing operations
to net cash provided by continuing operating activities:
Depreciation and amortization 3,586 4,240
Allowance for losses on cash advances 901 219
Loss from derivative valuation fluctuations 36 472
Changes in operating assets and liabilities-
Merchandise held for disposition 8,305 6,357
Finance and service charges receivable 1,948 1,828
Other receivables and prepaid expenses (338) 123
Accounts payable and accrued expenses (10,975) (3,162)
Customer deposits, net 581 432
Current income taxes 1,644 1,886
Deferred taxes, net 731 406
---------- ----------
Net cash provided by operating activities of continuing operations 11,622 16,034
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Loans forfeited and transferred to merchandise held for disposition 31,740 32,292
Loans and advances repaid or renewed 79,397 75,725
Loans and advances made, including loans renewed (100,488) (100,274)
---------- ----------
Net decrease in loans and advances 10,649 7,743
---------- ----------
Acquisitions, net of cash acquired (1,044) --
Purchases of property and equipment (2,371) (4,225)
---------- ----------
Net cash provided by investing activities of continuing operations 7,234 3,518
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net payments under bank lines of credit (12,068) (13,980)
Payments on notes payable and capital lease obligations (4,635) (371)
Change in notes receivable - stockholders -- 240
Treasury shares (purchased) sold (974) 69
Dividends paid (307) (304)
---------- ----------
Net cash used by financing activities of continuing operations (17,984) (14,346)
---------- ----------
EFFECT OF EXCHANGE RATE CHANGES ON CASH 20 (84)
---------- ----------
CASH PROVIDED BY CONTINUING OPERATIONS 892 5,122
CASH PROVIDED (USED) BY DISCONTINUED OPERATIONS 7 (3,486)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 6,394 4,626
---------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 7,293 $ 6,262
========== ==========
See notes to consolidated financial statements.
Page 4
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
1. BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Cash America
International, Inc. (the "Company") and its majority owned subsidiaries. All
significant intercompany accounts and transactions have been eliminated in
consolidation.
In September 2001, the Company announced plans to exit the rent-to-own
business in order to focus on its core business of lending activities. The
consolidated financial statements of the Company have been reclassified to
reflect the planned disposal of the rental business segment. See Note 3.
The financial statements as of March 31, 2002 and 2001, and for the
three month periods 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 month periods are not necessarily indicative of
the results that may be expected for the full fiscal year.
Certain amounts in the consolidated financial statements for the three
month period ended March 31, 2001, have been reclassified to conform to the
presentation format adopted in 2002. 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 2001 Annual Report to Stockholders.
2. REVENUE RECOGNITION
Lending Operations o Pawn loans ("loans") are made on the pledge of tangible
personal property. The Company accrues finance and service charges revenue on
all loans that the Company deems collectible based on historical loan redemption
statistics. For loans not repaid, the carrying value of the forfeited collateral
("merchandise held for disposition") is stated at the lower of cost (cash amount
loaned) or market.
Revenue is recognized at the time of disposition of merchandise.
Interim customer payments for layaway sales are recorded as deferred revenue and
subsequently recognized as revenue during the period in which final payment is
received.
Small consumer cash advances ("advances") provide customers with cash
in exchange for a promissory note or other repayment agreement supported by that
customer's check for the amount of the cash advanced plus a service fee. The
Company holds the check for a short period, typically less than 17 days. To
repay the advance, customers may redeem their checks by paying cash or they may
allow the checks to be processed for collection. The Company accrues fees and
interest revenue on advances on a constant yield basis ratably over the period
of the advance. For those locations that offer small consumer cash advances from
a third-party financial institution (the "Bank"), the Company receives an
administrative service fee for services provided on the Bank's behalf. These
fees are recorded in revenue when earned.
Page 5
Check Cashing Operations o The Company records fees derived from its owned check
cashing locations in the period in which the service is provided. Royalties
derived from franchise locations are recorded on the accrual basis.
3. DISCONTINUED OPERATIONS
In September 2001, the Company announced plans to exit the rent-to-own business
in order to focus on its core business of lending activities. The Company's
subsidiary, Rent-A-Tire, Inc. ("Rent-A-Tire") provides new tires and wheels
under a rent-to-own format to customers seeking this alternative to a direct
purchase. The Company initiated the plan to close 21 Rent-A-Tire operating
locations and sell the remaining 22 units. As of March 31, 2002, the Company
operated 22 Rent-A-Tire locations. The Company expects the plan to be completed
before September 2002.
Pursuant to Accounting Principles Board Opinion No. 30 "Reporting the
Results of Operations -- Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions," the consolidated financial statements of the Company have been
reclassified to reflect the planned disposal of the rental business segment.
Accordingly, the revenues, costs and expenses, assets, and cash flows of
Rent-A-Tire have been segregated in the consolidated balance sheets,
consolidated statements of operations and consolidated statements of cash flows.
The net operating results, net assets and net cash flows of this business
segment have been reported as "Discontinued Operations" in the accompanying
consolidated financial statements. The loss from discontinued operations does
not include any interest expense since the Company does not anticipate that debt
will be assumed by the buyer.
A reserve was recorded in September 2001 for the estimated loss on
disposal of the rental business segment, including a provision of $4,472,000 for
operating losses subsequent to September 1, 2001, the effective date of the plan
of disposition, and a provision of $6,489,000 for the estimated loss on the sale
of remaining assets. The components of the remaining balance of the combined
pre-tax charge of $10,961,000 ($7,553,000 after income tax benefit) and the
reserve activity during the three month period ended March 31, 2002, were as
follows (in thousands):
Reserve at Cash Non-Cash Reserve at
December 31, 2001 Expenditures Write Downs March 31, 2002
----------------- ------------ ----------- --------------
Inventory Reserve $ 140 $ -- $ (16) $ 124
================= ============ =========== ==============
Other closure/exit costs $ 2,044 $ (60) $ -- $ 1,984
Workforce reduction 25 -- -- 25
Additional operating
(income) during
phase-out period (555) (54) (114) (723)
Loss on sale of assets 6,439 (3) -- 6,436
----------------- ------------ ----------- --------------
Disposal Reserve $ 7,953 $ (117) $ (114) $ 7,722
================= ============ =========== ==============
"Other closure/exit costs" primarily includes non-cancelable operating
lease obligations.
Page 6
4. WEIGHTED AVERAGE SHARES
The reconciliation of basic and diluted weighted average common shares
outstanding for the three month periods ended March 31, 2002 and 2001, follows
(in thousands):
2002 2001
---------- ----------
Weighted average shares - Basic 24,521 24,653
Effect of shares applicable to stock option plans 268 1
Effect of shares applicable to nonqualified savings plan 73 65
---------- ----------
Weighted average shares - Diluted 24,862 24,719
========== ==========
5. ACQUISITIONS
During the three months ended March 31, 2002, the Company acquired 2 U.S.
pawnshops in purchase transactions for an aggregate cash consideration of
$1,044,000. The excess of the aggregate purchase price over the aggregate fair
market value of nets assets acquired was approximately $554,000.
6. GOODWILL AND OTHER INTANGIBLE ASSETS - ADOPTION OF SFAS 142
In June 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No.
142, "Goodwill and Other Intangible Assets." Goodwill and other intangible
assets having an indefinite useful life acquired in business combinations
completed after June 30, 2001, are no longer subject to amortization to
earnings. Effective January 1, 2002, all goodwill and other intangible assets
having an indefinite useful life are no longer amortized to earnings. The useful
lives of other intangible assets must be reassessed and the remaining
amortization periods adjusted accordingly. Goodwill and other intangible assets
having an indefinite useful life will be tested for impairment annually, or more
frequently if events or changes in circumstances indicate that the assets might
be impaired, using a two-step impairment assessment. The first step of the
goodwill impairment test, used to identify potential impairment, compares the
fair value of a reporting unit with its carrying amount, including goodwill. If
the fair value of a reporting unit exceeds its carrying amount, goodwill of the
reporting unit is considered not impaired, and the second step of the impairment
test is not necessary. If the carrying amount of a reporting unit exceeds its
fair value, the second step of the goodwill impairment test is performed to
measure the amount of impairment loss, if any. The Company adopted the
provisions of SFAS No. 142 on January 1, 2002 and will complete the first step
of the two-step impairment test prior to June 30, 2002. Management currently
does not expect to record an impairment charge upon completion of the initial
impairment review. However, there can be no assurance that at the time the
review is completed an impairment charge will not be recorded.
Page 7
Goodwill o The changes in the carrying value of goodwill are as follows (in
thousands):
Lending
-----------------------------------
United Check
States Foreign Total Cashing Consolidated
-------- -------- -------- -------- ------------
Balance as of January 1, 2002,
net of amortization of $24,224 $ 59,050 $ 12,453 $ 71,503 $ 5,183 $ 76,686
Acquired goodwill 554 -- 554 -- 554
Foreign translation impact -- (182) (182) -- (182)
-------- -------- -------- -------- ------------
Balance as of March 31, 2002 $ 59,604 $ 12,271 $ 71,875 $ 5,183 $ 77,058
======== ======== ======== ======== ============
Transitional Disclosures o Net income and net income per share excluding the
after-tax effect of amortization expense related to goodwill for the three
months ended March 31, 2002 and 2001 were as follows (in thousands, except per
share amounts; due to rounding, per share amounts may not total):
2002 2001
---------- ----------
Reported net income $ 5,203 $ 2,675
Add back: Goodwill amortization -- 641
---------- ----------
Adjusted net income $ 5,203 $ 3,316
========== ==========
Basic net income per share:
Reported net income $ 0.21 $ 0.11
Add back: Goodwill amortization -- 0.03
---------- ----------
Adjusted net income $ 0.21 $ 0.13
========== ==========
Diluted net income per share:
Reported net income $ 0.21 $ 0.11
Add back: Goodwill amortization -- 0.03
---------- ----------
Adjusted net income $ 0.21 $ 0.13
========== ==========
Acquired Intangible Assets o Acquired intangible assets that are subject to
amortization as of March 31, 2002 are as follows (in thousands):
Gross Accumulated
Amount Amortization Net
------ ------------ -----
Noncompetition agreements $4,116 $ (3,314) $ 802
Other 231 (159) 72
------ ------------ -----
Total $4,347 $ (3,473) $ 874
====== ============ =====
Noncompetition agreements are amortized over the applicable period of the
contract.
Page 8
Amortization o Amortization expense for the acquired intangible assets above is
as follows (in thousands):
Actual amortization expense
For the three months ended March 31, 2002 $ 154
Estimated amortization expense
For the year 2002 $ 478
For the year 2003 $ 188
For the year 2004 $ 84
For the year 2005 $ 81
For the year 2006 $ 76
7. LONG-TERM DEBT
The Company's long-term debt instruments and balances outstanding at March 31,
2002 and 2001 were as follows (in thousands):
2002 2001
-------- --------
U.S. Line of Credit up to $150,000
due June 30, 2003 $ 86,500 $ 71,700
Multi-currency Line of Credit up to L.20,000
due April 30, 2003 13,974 --
U.K. Line of Credit up to L.15,000
due April 30, 2002 -- 6,195
Swedish Line of Credit up to
SEK 185,000 -- 7,784
Swedish Line of Credit up to
SEK 30,000 -- 481
8.33% senior unsecured notes due 2003 8,571 12,857
8.14% senior unsecured notes due 2007 20,000 20,000
7.10% senior unsecured notes due 2008 25,714 30,000
6.25% subordinated unsecured notes due 2004 300 400
Capital lease obligations payable -- 5,409
-------- --------
155,059 154,826
Less current portion 8,671 10,165
-------- --------
Total long-term debt $146,388 $144,661
======== ========
8. OPERATING SEGMENT INFORMATION
The Company has two reportable operating segments in the lending industry and
one in the check cashing industry. While the United States and foreign lending
segments offer the same services, each is managed separately due to the
different operational strategies required. The check cashing operation offers
different services and products thus requiring its own technical, marketing and
operational strategy.
Page 9
As described in Note 3, the Company has reclassified the results of
operations of Rent-A-Tire as discontinued operations. This business was
previously reported as a separate operating segment. The segment data included
below has been restated to exclude amounts related to Rent-A-Tire.
Information concerning the segments is set forth below (in thousands):
Lending
----------------------------------
United Check
States Foreign Total Cashing Consolidated
-------- -------- -------- -------- ------------
Three Months Ended
March 31, 2002:
Total revenue $ 91,434 $ 8,166 $ 99,600 $ 1,120 $ 100,720
Income from operations 7,969 2,099 10,068 342 10,410
Total assets at March 31 268,177 76,443 344,620 7,280 351,900
-------- -------- -------- -------- ------------
Three Months Ended
March 31, 2001:
Total revenue $ 84,719 $ 7,838 $ 92,557 $ 999 $ 93,556
Income from operations 6,284 2,067 8,351 288 8,639
Total assets at March 31 247,912 70,836 318,748 12,650 331,398
======== ======== ======== ======== ============
9. LITIGATION
The Company is party to a number of lawsuits arising in the normal course of
business. In the opinion of management, the resolution of these matters will not
have a material adverse effect on the Company's financial position, results of
operations or liquidity.
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, 2002 vs. FIRST QUARTER ENDED MARCH 31, 2001
================================================================================
(Dollars in thousands)
The following table sets forth selected consolidated financial data
with respect to the Company and its operations as of March 31, 2002 and 2001,
and for the three months then ended.
2002 2001 Change
---------- ---------- ----------
REVENUE
Finance and service charges $ 28,820 $ 28,965 (1)%
Proceeds from disposition of merchandise 67,034 62,784 7%
Cash advance fees 3,562 625 470%
Check cashing royalties and fees 1,304 1,182 10%
---------- ---------- ----------
TOTAL REVENUE 100,720 93,556 8%
---------- ---------- ----------
COSTS OF REVENUE
Disposed merchandise 43,881 41,428 6%
---------- ---------- ----------
NET REVENUE $ 56,839 $ 52,128 9%
========== ========== ==========
OTHER DATA
CONSOLIDATED OPERATIONS:
Net revenue contribution by source--
Finance and service charges 50.7% 55.6% (9)%
Margin on disposition of merchandise 40.7% 41.0% (1)%
Cash advance fees 6.3% 1.2% 425%
Check cashing royalties and fees 2.3% 2.2% 5%
Expenses as a percentage of net revenue--
Operations and administration 73.8% 74.9% (1)%
Cash advance loss provision 1.6% .4% 300%
Depreciation and amortization 6.3% 8.1% (22)%
Interest, net 3.9% 5.4% (28)%
Income from operations as a percentage of total revenue 10.3% 9.2% 12%
---------- ---------- ----------
LENDING OPERATIONS:
PAWN LOANS
Annualized yield on pawn loans 106% 104% 2%
Average pawn loan balance outstanding $ 110,465 $ 112,837 (2)%
Average pawn loan balance per average location in operation $ 240 $ 244 (2)%
Average pawn loan amount at end of period (not in thousands) $ 100 $ 99 1%
Margin on disposition of merchandise as a percentage
of proceeds from disposition of merchandise 34.5% 34.0% 2%
Average annualized merchandise turnover 3.0x 3.0x --
Average merchandise held for disposition per average location $ 130 $ 122 7%
SMALL CONSUMER CASH ADVANCES
Total amount of advances written (a) $ 21,687 $ 5,853 271%
Number of advances written (not in thousands) (a) 76,472 27,039 183%
Average advance amount written (not in thousands) (a) $ 284 $ 216 31%
Average number of locations offering advances (not in thousands) (a) 390 340 15%
Combined advances outstanding (a) $ 5,219 $ 1,521 243%
Advances outstanding before allowance for losses (b) $ 1,753 $ 666 163%
Owned locations in operation-
Beginning of period 460 463
Acquired 2 --
Start-ups -- 1
Combined or closed (3) (4)
End of period 459 460 --
Additional franchise locations at end of period 13 16 (19)%
Total locations at end of period 472 476 (1)%
Average number of owned locations in operation 460 462 --
========== ========== ==========
CHECK CASHING OPERATIONS:
Check cashing royalties and fees $ 1,120 $ 999 12%
Franchised and owned check cashing centers--
Face amount of checks cashed $ 295,946 $ 272,977 8%
Gross fees collected $ 4,448 $ 4,022 11%
Average check cashed (not in thousands) $ 399 $ 376 6%
Centers in operation at end of period 136 132 3%
Average centers in operation for the period 135 132 2%
========== ========== ==========
(a) Includes advances made by the Company and advances made by a third-party
financial institution.
(b) Amounts recorded in the Company's consolidated financial statements.
Page 11
GENERAL
The Company is a provider of specialty financial services to individuals in the
United States, United Kingdom and Sweden. The Company offers secured
non-recourse loans, commonly referred to as pawn loans, to individuals through
its lending operations. The pawn loan portfolio generates finance and service
charges revenue. A related but secondary source of revenue is the disposition of
merchandise, primarily collateral from unredeemed pawn loans. As an alternative
to a pawn loan, the Company offers small consumer cash advances in selected
lending locations and on behalf of a third-party financial institution in other
locations. The Company also provides check cashing services through its
franchised and company owned Mr. Payroll(R) manned check cashing centers.
The number of lending locations declined by 7 during the 15 months
ended March 31, 2002. It acquired 7 operating units, established 2 locations,
and combined or closed 13 locations. In addition, one franchise unit was opened
and 4 units were closed. As of March 31, 2002, the Company's lending operations
consisted of 472 lending units (403 owned units and 13 franchised units in 18
states in the United States, 45 jewelry-only units in the United Kingdom, and 11
loan-only and primarily jewelry-only units in Sweden).
As of March 31, 2002, Mr. Payroll operated 129 franchised and 7 company
owned manned check cashing centers in 20 states.
RESULTS OF OPERATIONS
FIRST QUARTER ENDED MARCH 31, 2002, COMPARED TO THE
FIRST QUARTER ENDED MARCH 31, 2001
CONSOLIDATED NET REVENUE. Consolidated net revenue increased 9.0%, or $4.7
million, to $56.8 million during the first quarter ended March 31, 2002 (the
"current quarter") from $52.1 million during the first quarter ended March 31,
2001 (the "prior year quarter"). The following table sets forth net revenue
results by operating segment for the three month periods ended March 31 ($ in
millions):
2002 2001 Increase (decrease)
------------ ------------ -----------------------------
Domestic lending $ 49.3 $ 45.2 $ 4.1 9.1%
Foreign lending 6.4 5.9 .5 8.5%
------------ ------------ ------------ ------------
Total lending 55.7 51.1 4.6 9.0%
Check cashing 1.1 1.0 .1 10.0%
------------ ------------ ------------ ------------
Consolidated $ 56.8 $ 52.1 $ 4.7 9.0%
============ ============ ============ ============
The Company's domestic lending operations generated the majority of the
increase in consolidated net revenue. Higher disposition of merchandise and
higher revenue from the Company's small consumer cash advance product accounted
for the increase in net revenue.
The components of net revenue are finance and service charges from pawn
loans, which decreased $.1 million; net revenue from the disposition of
merchandise, which increased $1.8
Page 12
million; cash advance fees, which increased $2.9 million; and check cashing fees
and royalties, which increased $.1 million. Management believes that the trend
of higher cash advance fees will continue during 2002 as customers may choose to
use both pawn and cash advance products. This will likely cause a more moderate
increase, or potentially a decrease, in finance and service charges in 2002 that
should be offset by higher cash advance fees.
FINANCE AND SERVICE CHARGES. The following is a summary of finance and service
charges related to pawn loans by operating segment for the three months ended
March 31 ($ in millions):
2002 2001 Increase (decrease)
------------ ------------ ------------------------------
Domestic lending $ 23.3 $ 23.5 $ (.2) (.9)%
Foreign lending 5.5 5.4 .1 1.9%
------------ ------------ ------------ ------------
Total $ 28.8 $ 28.9 $ (.1) (.3)%
============ ============ ============ ============
Variations in finance and service charges on pawn loans are caused by
changes in the average balance of pawn loans outstanding, the annualized yield
of the pawn loan portfolio, and the effects of translation of foreign currency
amounts into United States dollars. The following table identifies the impact
that each of these factors had on the total change in finance and service
charges ($ in millions):
Average Total Before
Balance Loan Foreign Foreign
Outstanding Yield Translation Translation Total
----------- ----------- ------------ ----------- -----------
Domestic lending $ (.3) $ .1 $ (.2) $ -- $ (.2)
Foreign lending .1 .2 .3 (.2) .1
----------- ----------- ----------- ----------- -----------
Total $ (.2) $ .3 $ .1 $ (.2) $ (.1)
=========== =========== =========== =========== ===========
Excluding the negative effects of foreign currency translation
adjustments, the company-wide average balance of pawn loans outstanding was .7%
lower during the current quarter than the prior year quarter. On a segment
basis, the average balances of pawn loans were 1.5% lower and .6% higher for the
domestic and foreign lending operations, respectively. The decrease in the
average balance of domestic pawn loans outstanding was driven by a 1.7% decline
in the average number of pawn loans outstanding during the current quarter
coupled with a .2% increase in the average amount per loan. Management believes
that the decrease in the number of domestic pawn loans was partly attributable
to more customers seeking to satisfy their short-term borrowing needs through a
cash advance instead of through a pawn loan and also due to larger per capita
tax refunds believed to have been received by pawn loan customers in the first
quarter of 2002 compared to the prior year. The aggregate average balance of
domestic pawn loans and combined consumer cash advances outstanding was 4.3%
higher during the current quarter. Management believes that this trend will
continue throughout the remainder of 2002. The average balance of pawn loans
outstanding denominated in their local currencies increased 4.6% and decreased
5.0% in the United Kingdom and Sweden, respectively. Foreign loan demand was
mixed as the average number of pawn loans outstanding in the United Kingdom and
Sweden increased 2.6% and decreased 6.7%, respectively. Average amounts per loan
were higher for both the United Kingdom and Sweden by 2.0% and 1.8%,
respectively.
Domestic pawn loan balances at March 31, 2002 declined $11.6 million,
or 15.1%, from December 31, 2001 balances. The decline for the comparable period
of the preceding year was $7.7 million, or 10.2%. The Company historically
experiences a decrease in domestic pawn loan
Page 13
balances during the first quarter of each year when the Internal Revenue Service
processes federal income tax refunds. Management believes that many customers
use a portion of their refund to repay their loans and purchase items of
personal property. Aggregate pawn loan balances at March 31, 2002, were $11.0
million, or 9.4% lower than at December 31, 2001, compared to a $10.5 million,
or 8.9%, decrease between the comparable dates in the preceding year.
Excluding the negative effects of foreign currency translation
adjustments, the consolidated annualized loan yield, which represents the
blended result derived from the distinctive loan yields realized from operations
in the three countries, was 105.1% in the current year quarter, compared to
103.2% in the prior year quarter. There was an increase in the domestic
annualized loan yield to 134.5% for the current year quarter, compared to 133.9%
for the prior year quarter, the blended yield on average foreign pawn loans
outstanding increased to 55.5% in the current year quarter compared to 52.8% in
the prior year quarter. The increase in the blended foreign yield was caused by
a combination of higher loan redemption rates and higher returns on the
disposition of unredeemed collateral at auction.
Foreign source finance and service charges were reduced $.2 million in
2002 due to negative currency translation adjustments resulting from the
continued strength of the United States dollar against the Swedish kronor. The
weighted average exchange rates used for translating earnings into United States
dollars for the British pound sterling and Swedish kronor were 2.1% and 7.0%
lower, respectively, during the current quarter compared to the prior year
quarter. Management anticipates a continued unfavorable translation adjustment
for the kronor for the second quarter of 2002, but expects a neutral translation
between the British pound and the U.S. dollar.
NET REVENUE FROM THE DISPOSITION OF MERCHANDISE. Net revenue from the
disposition of merchandise represents the proceeds received from the disposition
of merchandise in excess of the cost of merchandise disposed. The combination of
increased proceeds and a slightly higher margin resulted in a $1.8 million, or
8.4%, increase in net revenue from the disposition of merchandise. The following
table summarizes by operating segment the change in the proceeds from the
disposition of merchandise and the related net margin for the current quarter
compared to the prior year quarter ($ in millions):
Increase (decrease)
----------------------------------------------------------------
Disposition % Net %
Proceeds Change Margin Change
------------ ------------ ------------ ------------
Domestic lending $ 4.0 6.7% $ 1.5 7.1%
Foreign lending .2 10.1% .3 90.4%
------------ ------------ ------------ ------------
Total $ 4.2 6.8% $ 1.8 8.4%
============ ============ ============ ============
Proceeds from the disposition of merchandise were 6.8%, or $4.2
million, higher than in the prior year quarter, primarily due to an increase in
volume of items sold in the domestic lending locations and an increase in the
disposition of scrap gold jewelry. The consolidated merchandise turnover rate
remained unchanged at 3.0 times during the current quarter and the prior year
quarter, and the margin on disposition of merchandise increased slightly to
34.5% in the current quarter from 34.0% in the prior year quarter. Excluding the
effect of the disposition of scrap jewelry, the margin on disposition of
merchandise increased to 36.0% in the current quarter from 35.7% in the prior
year quarter due to a slightly lower average cost of merchandise disposed. The
margin on disposition of scrap jewelry was 17.6% in the current quarter compared
to 4.6% in the prior year quarter due to a higher settlement price per ounce.
Page 14
CASH ADVANCE FEES. Cash advance fees increased $2.9 million, or 470%, in the
current quarter as compared to the prior year quarter. The increase resulted
from higher demand for the small consumer cash advance product that the Company
began offering and promoting in 2000. The product is available in 392 domestic
lending units at March 31, 2002, including 322 units that offer the product on
behalf of a third-party financial institution (the "Bank"), which pays the
Company a fee for its administrative services. (Although these cash advance
transactions may take the form of loans or deferred check deposit transactions,
the transactions are referred to throughout this discussion as "advances" for
convenience.)
Advances written increased $15.8 million to $21.7 million in the
current quarter from $5.9 million in the prior year quarter. The $21.7 million
in advances written in the current quarter includes $18.4 million extended to
customers by the Bank. The average amount per advance increased to $284 from
$216 and the combined portfolio of advances generated $3.9 million in revenue
during the current quarter compared to $.9 million in the prior year quarter.
Included in "Cash advance fees," in the Company's consolidated statements of
operations, is $3.6 million and $.6 million in revenue from the Company's
portfolio and fees for administrative services performed for the Bank for the
three month periods ended March 31, 2002 and 2001, respectively. The outstanding
combined Company and Bank portfolio of short-term advances increased $3.7
million to $5.2 million at March 31, 2002 from $1.5 million at March 31, 2001.
Included in these amounts are $1.8 million and $.7 million for 2002 and 2001,
respectively, that are included in the Company's consolidated balance sheets.
Against these outstanding amounts, an allowance for losses of $.5 million and
$.3 million has been provided in the consolidated financial statements for March
31, 2002 and 2001, respectively. The net balance is carried in "Other
receivables" on the consolidated balance sheets.
CHECK CASHING ROYALTIES AND FEES. Check cashing revenue for Mr. Payroll
increased $.1 million, or 10.0%, in the current quarter, while check cashing
fees in the United Kingdom remained unchanged at $.2 million for the same
period.
OPERATIONS AND ADMINISTRATION EXPENSES. Consolidated operations and
administration expenses as a percentage of net revenue were 73.8% in the current
quarter compared to 74.9% in the prior year quarter. These expenses increased
$2.9 million, or 7.5%, in the current quarter compared to the prior year
quarter. Domestic lending expenses increased $2.5 million, primarily as a result
of higher personnel costs and increased expenses of $.6 million related to the
short-term cash advance product. Increased personnel costs were attributable to
higher benefit costs, incentive expenses associated with the improvement in
operating results, and slightly higher staffing levels. Foreign lending
operations expenses increased $.3 million primarily due to an increase in the
number of locations in the United Kingdom. Mr. Payroll's expenses increased $.1
million in the current quarter compared to the prior year quarter, primarily due
to higher personnel and occupancy costs.
CASH ADVANCE LOSS PROVISION. Cash advance loss provision for domestic lending
operations increased $.7 million due to the increase in the size of the
portfolio. The Company's cash advance product primarily services a customer base
of non-prime borrowers. The Company maintains an allowance for losses on its
advances at a level estimated to be adequate to absorb future credit losses
inherent in the outstanding advance portfolio. The cash advance loss provision
is utilized to increase the allowance carried against the outstanding
receivables portfolio. Loss provision as a percentage of cash advance fees
decreased to 25.3% in the current quarter from 35.0% in the prior year quarter,
primarily as a result of improved collections and a higher percentage of the
portfolio being comprised of previous customers.
Page 15
DEPRECIATION AND AMORTIZATION. Depreciation and amortization expenses as a
percentage of net revenue were 6.3% in the current quarter compared to 8.1% in
the prior year quarter. Total depreciation and amortization expenses decreased
$.6 million, or 15.4%. Effective January 1, 2002, the Company adopted Statement
of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other
Intangible Assets". Under SFAS No. 142, the Company ceased amortizing all
goodwill and other intangible assets having an indefinite useful life. See Note
6 of Notes to Consolidated Financial Statements. A $.7 million decline in
amortization due to the adoption of SFAS 142 was partially offset by an increase
in depreciation expense associated with the reoccupation of the Company's
reconstructed corporate headquarters after it was severely damaged by a tornado
in March 2000.
INTEREST EXPENSE. Net interest expense as a percentage of net revenue declined
to 3.9% in the current quarter from 5.4% in the prior year quarter. The amount
decreased a net $.6 million, or 21.0%, due to the effect of lower blended
borrowing costs accompanied by a 1.1% reduction in the Company's average debt
balance. The effective blended borrowing cost decreased to 5.5% in the current
quarter from 6.9% in the prior year quarter. The average amount of debt
outstanding decreased during the current quarter to $165.3 million from $167.2
million during the prior year quarter.
LOSS FROM DERIVATIVE VALUATION FLUCTUATIONS. Effective January 1, 2001, the
Company implemented SFAS No. 133 "Accounting for Derivative Instruments and
Hedging Activities" and its corresponding amendments under SFAS No. 138. The
adjustments to fair values of interest rate cap agreements during the current
quarter resulted in a loss of $36,000 compared to a loss of $472,000 in the
prior year quarter.
INCOME TAXES. The Company's effective tax rate for the quarter ended March 31,
2002 was 36.0% as compared to 39.3% for the quarter ended March 31, 2001. By
excluding goodwill amortization and their related tax effects in the prior year
quarter, the Company's consolidated effective tax rate was 36.1% for the prior
year quarter.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities of continuing operations was $11.6
million in the current quarter. A reduction of the Company's investment in pawn
loans and cash advances during the current quarter provided an additional $10.6
million
The Company invested $2.4 million in purchases of property and
equipment during the current quarter for property improvements, the remodeling
of selected operating units and additions to computer systems for lending
operations. During the current quarter, the Company acquired 2 lending locations
for $1.0 million and used cash to make payments of $16.7 million on debt
obligations in connection with unsecured notes and capital leases, $.3 million
for dividends, and $1.0 million for the purchase of treasury shares.
Management anticipates that capital expenditures for the remainder of
2002 will be approximately $12.0 million. These expenditures will primarily
relate to an estimated 8 to 13 new lending locations, the remodeling of selected
operating units, and enhancements to information systems. The new lending
locations will mostly occur through the acquisition of existing locations.
Page 16
On October 26, 2000, the Company announced that its Board of Directors
authorized management to purchase up to one million shares of its common stock
in the open market. Under the authorization, the Company purchased 137,100
shares for an aggregate amount of $1.0 million during the current quarter.
Additional purchases (up to 100,800 shares) may be made from time to time in the
open market, and it is expected that funding would come from operating cash
flow.
At March 31, 2002, $86.5 million was outstanding on the Company's $150
million U.S. line of credit. In addition, the Company's L.20 million
(approximately $28.5 million at March 31, 2002) multi-currency line of credit in
the United Kingdom had balances outstanding of L.3.7 million (approximately $5.2
million at March 31, 2002) and SEK 90.5 million (approximately $8.7 million at
March 31, 2002) related to operations in the United Kingdom and Sweden,
respectively. While the Company's lines of credit mature during 2003, the
Company expects to renew these credit agreements and extend the maturity dates
during 2002.
Management believes that borrowings available under these credit
facilities, cash generated from operations and current working capital of $162.8
million should be sufficient to meet the Company's anticipated future capital
requirements.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risks relating to the Company's operations result primarily from
changes in interest rates, foreign exchange rates, and gold prices. The Company
does not engage in speculative or leveraged transactions, nor does it hold or
issue financial instruments for trading purposes. There have been no material
changes to the Company's exposure to market risks since December 31, 2001.
Page 17
DOMESTIC LENDING OPERATIONS
(Dollars in thousands)
The following table sets forth selected financial data for the
Company's domestic lending operations as of March 31, 2002 and 2001, and for the
three months then ended.
2002 2001 Change
---------- ---------- ----------
REVENUE
Finance and service charges $ 23,315 $ 23,560 (1)%
Proceeds from disposition of merchandise 64,557 60,534 7%
Cash advance fees 3,562 625 470%
---------- ---------- ----------
TOTAL REVENUE 91,434 84,719 8%
---------- ---------- ----------
COSTS OF REVENUE
Disposed merchandise 42,076 39,531 6%
---------- ---------- ----------
NET REVENUE $ 49,358 $ 45,188 9%
========== ========== ==========
OTHER DATA
Net revenue contribution by source--
Finance and service charges 47.2% 52.1% (9)%
Margin on disposition of merchandise 45.5% 46.5% (2)%
Cash advance fees 7.3% 1.4% 421%
Expenses as a percentage of net revenue--
Operations and administration 76.2% 77.8% (2)%
Cash advance loss provision 1.8% .5% 260%
Depreciation and amortization 5.8% 7.8% (26)%
Interest, net 2.4% 2.8% (14)%
Income from operations as a percentage of total revenue 8.7% 7.4% 18%
Annualized yield on pawn loans 134% 134% --
Average pawn loan balance outstanding $ 70,323 $ 71,362 (1)%
Average pawn loan balance per average location in operation $ 174 $ 174 --
Average pawn loan amount at end of period (not in thousands) $ 82 $ 82 --
Margin on disposition of merchandise as a percentage
of proceeds from disposition of merchandise 34.8% 34.7% --
Average annualized merchandise turnover 3.0x 3.0x --
Average merchandise held for disposition
per average location $ 140 $ 131 7%
Owned locations in operation--
Beginning of period 404 410
Acquired 2 --
Start-ups -- 1
Combined or closed (3) (4)
End of period 403 407 (1)%
Additional franchise locations at end of period 13 16 (19)%
Total locations at end of period 416 423 (2)%
Average number of owned locations in operation 404 409 (1)%
========== ========== ==========
Page 18
FOREIGN LENDING OPERATIONS
(Dollars in thousands)
The following table sets forth selected consolidated financial data in
U.S. dollars for Harvey & Thompson, Ltd. and Svensk Pantbelaning as of March 31,
2002 and 2001, and for the three months then ended, using the following currency
exchange rates:
2002 2001 Change
---------- ---------- ----------
Harvey & Thompson, Ltd. (British pound sterling per U.S. dollar)--
Balance sheet data - end of period rate .7014 .7063 1%
Statements of operations data - average rate for the period .7011 .6861 (2)%
Svensk Pantbelaning (Swedish kronor per U.S. dollar)--
Balance sheet data - end of period rate 10.3615 10.4110 --
Statements of operations data - average rate for the period 10.4438 9.7565 (7)%
========== ========== ==========
REVENUE
Finance and service charges $ 5,505 $ 5,405 2%
Proceeds from disposition of merchandise 2,477 2,250 10%
Check cashing fees 184 183 1%
---------- ---------- ----------
TOTAL REVENUE 8,166 7,838 4%
---------- ---------- ----------
COSTS OF REVENUE
Disposed merchandise 1,805 1,897 (5)%
---------- ---------- ----------
NET REVENUE $ 6,361 $ 5,941 7%
========== ========== ==========
OTHER DATA
Net revenue contribution by source--
Finance and service charges 86.5% 91.0% (5)%
Margin on disposition of merchandise 10.6% 5.9% 80%
Check cashing fees 2.9% 3.1% (6)%
Expenses as a percentage of net revenue--
Operations and administration 58.1% 56.9% 2%
Depreciation and amortization 8.9% 8.3% 7%
Interest, net 2.1% 3.8% (45)%
Income from operations as a percentage of total revenue 25.7% 26.4% (3)%
Annualized yield on loans 56% 53% 6%
Average pawn loan balance outstanding $ 40,142 $ 41,475 (3)%
Average loan balance per average location in operation $ 717 $ 783 (8)%
Average loan amount at end of period (not in thousands) $ 158 $ 156 1%
Margin on disposition of merchandise as a percentage
of proceeds from disposition of merchandise 27.1% 15.7% 73%
Average annualized merchandise turnover 2.2x 2.8x (21)%
Average merchandise held for disposition
per average location $ 58 $ 53 9%
Lending locations in operation--
Beginning of period 56 53
End of period 56 53 6%
Average number of locations in operation 56 53 6%
========== ========== ==========
Page 19
CAUTIONARY STATEMENT REGARDING RISKS AND UNCERTAINTIES THAT MAY AFFECT FUTURE
RESULTS
This quarterly report, including management's discussion and analysis, contains
statements that are forward-looking, as that term is defined by the Private
Securities Litigation Reform Act of 1995 or by the Securities and Exchange
Commission in its rules. The Company intends that all forward-looking statements
be subject to the safe harbors created by these laws and rules. When used in
this quarterly report, the words "believes", "estimates", "plans", "expects",
"anticipates", and similar expressions as they related to the Company or its
management are intended to identify forward-looking statements. All
forward-looking statements are based on current expectations regarding important
risk factors. 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 expressed in the forward-looking statements. Accordingly, actual
results may differ materially from those expressed in the forward-looking
statements, and the making of such statements should not be regarded as a
representation by the Company or any other person that the results expressed in
the statements will be achieved. Important risk factors include, but are not
limited to, the following: 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.
Page 20
PART II
Item 1. LEGAL PROCEEDINGS
See Note 9 of Notes to Consolidated Financial Statements
Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
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 - None
(b) Reports on Form 8-K - None
Page 21
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.
Executive Vice President and
Chief Financial Officer
Date: May 13, 2002
Page 22