Cash America 2006 Annual Report Download - page 6

To my fellow
shareholders,
2006 was a great year
to be a shareholder of
Cash America. I know
because I’m married to
a signicant shareholder
who commented
frequently in 2006
that she was enjoying
Cash America’s share
price appreciation.
By the way, this is
the same lady who quickly lets me know when things
are not going well, which she has found an occasional
opportunity to do during my lengthy career at Cash
America. Please take comfort in the knowledge that I’ll
be working hard to extend this moment of marital bliss
well into 2007 and beyond.
2006 was indeed a great year for both the Company
and its shareholders, a causal relationship which
should, but doesn’t necessarily, always follow. Cash
America enjoyed another record year for revenue and
net income while also registering
stock appreciation of 102% for the
calendar year and posting an all-
time high stock price of $47.98 per
share in late December. For those of
you interested in other benchmarks,
2006 was the rst year in our
history that we passed the $100
million threshold in income from
operations, broke the $2 barrier
for earnings per share and eclipsed
the $1 billion mark for market
capitalization. We also achieved
most of our non-nancial goals that
now form stepping stones for
future growth.
While it is fun to highlight the specic
accomplishments of Cash America, I would be remiss
if I failed to acknowledge that 2006 was a great year
for most of the companies operating within our sector
of specialty nance. I believe the share appreciation
of all of the public companies in our space handily
beat the returns of the S&P 500, and a number of our
competitors also registered record-high share prices
during the year. My competitive juices urge me to spin
a tale enumerating the many ways our home run was
better than their home run, but the reality is that we all
stepped up to the plate and made solid contact against
a pitcher (a.k.a. market conditions) who failed to throw
any regulatory curveballs and served a high-hanging
fastball of robust consumer demand. Like competitors
in any industry, in the deep recess of our emotional
psyche, we secretly hope our competitors stumble as we
sprint ahead. Fortunately, rational thought prevails in
teaching us that our shareholders benet the most when
the entire sector performs well. Clearly, the success of
the entire sector has elevated earnings multiples to a
level that each of us may have found difcult to reach
as a stand-alone winner.
Interestingly, the market success of our sector
has attracted the heightened attention of a number of
watchful constituents, some welcomed and some not.
The private equity funds have now entered our
world with signicant investments and plans for
expansion. In 2006, one East Coast
fund purchased a private payday
lender based in Ohio, and another
East Coast fund purchased ACE
Cash Express, a public company
offering check cashing and payday
loan services. The ACE transaction
alone was valued at $455 million,
demonstrating a sizable investment
in our sector. The entrance of private
equity groups into our business realm
helps validate our business model
and brings new capital and talent to
the industry. While this development
adds another layer of competitive
threat, I believe the sector would
be foolish to do anything but welcome the enhanced
visibility and validation private equity brings to
our companies.
In addition to the private equity funds, the more
traditional nancial institutions such as commercial
banks, credit unions, thrifts and credit card companies
have remained interested constituents. These lenders
4
$0.0
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
$0.80
Quarterly earnings per share from continuing operations
$0.51
$0.36
$0.42
$0.71
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