Cash America 2001 Annual Report Download

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2OO1 ANNUAL REPORT
CASH AMERICA INTERNATIONAL •INC

Table of contents

  • Page 1
    C A S H A M E R I C A I N T E R N A T I O N A L • I N C 2 O O 1 A N N U A L R E P O R T

  • Page 2
    ... all year long. York Stock Exchange under the symbol "PWN." America common shares are listed on the New cashing services through its wholly owned States, 45 in the United Kingdom and 11 in Sweden. Cash America also provides check business consists of 473 locations worldwide as of December 31, 2001...

  • Page 3
    ... Stock Data ...36 Corporate Information . .Inside Back Cover Lending Locations As of December 31, DOMESTIC Texas Florida Tennessee Georgia Louisiana Oklahoma Missouri Indiana Illinois North Carolina Alabama Kentucky South Carolina Utah Ohio Colorado Kansas Nebraska Total Domestic INTERNATIONAL...

  • Page 4
    ... the job market and quarter of 2001 registering weekly loan volumes as high weakening of consumer confidence. Remember, the as $2 million in the weeks between pay periods. This most profitable customer segment for Cash America is level of lending volume provided the scale we needed for employed blue...

  • Page 5
    ...operate a cash flow business demanding focus and everyday execution. Demand for pawn loans should strengthen as the economy readjusts to more traditional GDP growth rates. New opportunities for additional products and services are clearly within our reach. Money transfer, check cashing, bill payment...

  • Page 6
    ... C ash America's customers are hard at work, providing essential services to our community. The road crews, landscaping people, fast food Innovative People & Technology Refocusing on our core lending business is the collective mission of everyone at Cash America. Proprietary training programs for...

  • Page 7
    ...period of time before the next paycheck. These cash advances are unsecured and are based on the customer's promise to pay, specified credit criteria and a personal check representing the amount due at maturity. Consumer demand for this cash advance product has been strong and Cash America intends to...

  • Page 8
    ... America pawn loan. When a customer needs cash immediately to pay an automobile repair bill, doctor visit or make do during a work interruption, Cash America provides a convenient opportunity for a short-term loan to meet that need. In all cases, the customer simply brings a common item of personal...

  • Page 9
    ... company's full resources, back to our core lending operation. Over the years, Cash America has developed a unique and successful approach to the pawn industry. That approach includes helpful, customer-friendly employees, clean, well-lit environments, advanced technology, Composition of Net Revenue...

  • Page 10
    ...Chicago (9) Omaha Salt Lake City (7) Denver (1) Kansas City (11) Colorado Springs (3) Pueblo Wichita Tulsa (5) Oklahoma City (12) Memphis (22) St. Louis (5) Louisville (9) Indianapolis (9) Fort Wayne (3) Cincinnati (6) Greensboro Winston Salem (2) Charlotte (6) Nashville (5) Birmingham (4) Lubbock...

  • Page 11
    ... they have been serving customers for over 100 years, and joined the Cash America family in 1994. Svensk Pantbelåning operates a total of 11 locations throughout Sweden, including some of the single largest shops in terms of loan balances in our entire organization. Specializing in SCOTLAND Dundee...

  • Page 12
    ... institution in other locations. The Company also provides check cashing services through its franchised and company owned Mr. Payroll® manned check cashing centers. The Company expanded its lending operations during the three years ended December 31, 2001, by adding a net 4 locations. It acquired...

  • Page 13
    ... Company's small consumer cash advance product accounted for the higher net revenue. The components of net revenue are finance and service charges from pawn loans, which decreased $.8 million; net revenue from the disposition of merchandise, which increased $5.5 million; other domestic lending fees...

  • Page 14
    ...at the end of 2001, including 315 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...

  • Page 15
    ... years, the amortization of the cost of interest rate cap agreements was included in interest expense. During 2000, the Company recorded a $9.7 million gain from the settlement of the insurance claim resulting from the severe damage to its corporate headquarters in Fort Worth, Texas by a tornado...

  • Page 16
    ... for 2000. Check Cashing Royalties and Fees. Net revenue for Mr. Payroll decreased $.1 million, or 2.0%, from the prior year, while check cashing fees in the United Kingdom remained flat at $.7 million. The 1999 restructuring of the Company's check cashing machine operations and deconsolidation of...

  • Page 17
    ... of corporate headquarters property destroyed by the March 2000 tornado and $.1 million in various fixtures and additions to Mr. Payroll's point-of-sale software system. The Company acquired 5 lending locations for $1.3 million and discontinued operations utilized $2.9 million of cash during 2001...

  • Page 18
    ...: 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...

  • Page 19
    ... Operations: Check cashing royalties and fees Franchised and owned check cashing centers - Face amount of checks cashed Gross fees collected Average check cashed (not in thousands) Centers in operation at end of year Average centers in operation for the year (b) Amounts recorded in the Company...

  • Page 20
    ... administration Depreciation and amortization Interest, net Income from operations as a percentage of total revenue Annualized yield on pawn loans Average pawn loan balance outstanding Average pawn loan balance per average location in operation Average pawn loan amount at year-end (not in thousands...

  • Page 21
    ...cashing fees Expenses as a percentage of net revenue - Operations and administration Depreciation and amortization Interest, net Income from operations as a percentage of total revenue Annualized yield on pawn loans Average pawn loan balance outstanding Average pawn loan balance per average location...

  • Page 22
    Consolidated Balance Sheets - December 31 (In thousands, except share data) 2001 2000.. ASSETS Current assets: Cash and cash equivalents Loans Merchandise held for disposition, net Finance and service charges receivable Other receivables and prepaid expenses Income taxes recoverable Deferred tax ...

  • Page 23
    ...of Operations - Years Ended December 31 (In thousands, except per share data) 2001 REVENUE Finance and service charges Proceeds from disposition of merchandise Other lending fees and royalties Check cashing royalties and fees TOTAL REVENUE COSTS OF REVENUE Disposed merchandise NET REVENUE OPERATING...

  • Page 24
    ... rate changes on cash Cash provided by continuing operations Cash used by discontinued operations Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year SUPPLEMENTAL DISCLOSURES Noncash investing and financing activities: Loans to stockholders for exercise of stock...

  • Page 25
    ...Years Ended December 31 (In thousands, except share data) Common Stock Shares Amount Balance at December 31, 1998 Comprehensive income: Net...reissued Tax benefit from exercise of option shares Change in notes receivable - stockholders Balance at December 31, 2001 See notes to consolidated financial ...

  • Page 26
    ... 31, 2001, Mr. Payroll operated 127 franchised and 7 company owned manned check cashing centers in 20 states. hensive income (loss) as a separate component of stockholders' equity. Revenue and expenses are translated at the monthly average exchange rates occurring during each year. Cash and Cash...

  • Page 27
    .... Advertising Costs • Costs of advertising are expensed at the time of first occurrence. Advertising expense for continuing operations was $4,104,000, $4,202,000 and $3,427,000 for the years ended December 31, 2001, 2000 and 1999, respectively. Stock-Based Compensation • The Company applies the...

  • Page 28
    ... 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...

  • Page 29
    ... of operations. 5. Small Consumer Cash Advances and Allowance for Losses Small consumer cash advances are generally offered for a term of 7 to 31 days, depending on the customer's next payday. In addition to the advances originated by the Company in some of its locations, advances are offered in...

  • Page 30
    ... $ 68,450 On March 28, 2000, a tornado severely damaged the Company's corporate headquarters in Fort Worth, Texas. Headquarters operations were relocated to temporary facilities. The Company's operating locations were not affected. The Company owns the building and restoration began in the fourth...

  • Page 31
    ...000 and $402,000 in 2001, 2000, and 1999, respectively. Interest capitalized in 2001 in connection with the restoration of the Company's corporate headquarters was $423,000. The components of the provision for income taxes and the income to which it relates for the years ended December 31 are shown...

  • Page 32
    ...1996 and 2001. Program participants may 14. Stock Options Under various plans (the "Plans") it sponsors, the Company is authorized to issue 8,300,000 shares of Common Stock pursuant to "Awards" granted as incentive stock options (intended to qualify under Section 422 of the Internal Revenue Code of...

  • Page 33
    .... If compensation costs for the Company's stock options had been determined on the fair value based method of accounting discussed above, the Company's net income (loss) and related amounts per share basic and diluted for each of the years ended December 31 would have been reported as follows...

  • Page 34
    ... provides check cashing services to individuals through franchised and company owned Mr. Payroll service centers. The accounting policies of the segments are the same as those described in Note 2. Management of the Company evaluates performance based on income or loss from operations before net...

  • Page 35
    .... The Company recorded management fee income of $60,000 and $35,000 for 2000 and 1999, respectively, and $30,000 in franchise fee revenue for 1999. 17. Fair Values of Financial Instruments Cash and cash equivalents bear interest at market rates and have maturities less than 90 days. Pawn loans have...

  • Page 36
    ... continuing operations are as follows for each of the years ending December...operations was $22,188,000, $21,836,000 and $20,682,000 for 2001, 2000 and 1999, respectively. Litigation • The Company is party to a number of lawsuits arising in the normal course of business. In the opinion of management...

  • Page 37
    ... of their operations and their cash flows for each of the three years in the period ended December 31, 2001 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management; our responsibility...

  • Page 38
    ...of Operations and Financial Condition" for amounts related to gains from disposals of assets, equity in losses of unconsolidated subsidiaries, and other items for the years 1999 through 2001. Common Stock Data The New York Stock Exchange is the principal exchange on which Cash America International...

  • Page 39
    ... Operations Hugh A. Simpson Executive Vice President General Counsel and Secretary Other Information Corporate Offices Cash America International Building 1600 West 7th Street Fort Worth, Texas 76102-2599 (817) 335-1100 www.cashamerica.com Transfer Agent and Registrar Mellon Investor Services...

  • Page 40
    Cash America International, Inc. 1600 West 7th Street Fort Worth, Texas 76102-2599 (817) 335-1100 www.cashamerica.com