Cash America 2009 Annual Report Download - page 6

At this point last year, I was
struggling to find the clarity and
confidence I would normally rally in
composing my annual message to
shareholders. We had just completed a
difficult year in 2008 when we joined most
global businesses in suffering through a
retreating economy, frozen credit markets,
changing consumer behavior and a stock
market reeling from value destruction not
experienced since the Great Depression.
In addition to this scrum of macro
factors, our particular plight was further
burdened by a series of unfavorable
regulatory/legislative activities related to
our short-term cash advance product in
a few key states. Toss in a new populist
administration in Washington, and
you can imagine the haze covering the
planning horizon for most CEOs in 2009.
A year later, the haze has lifted to
reveal a macroeconomic sky the local
weatherman might describe as “cloudy
with occasional rays of sunshine.” The
world appears to have dodged the collapse
of global banking institutions, and credit
markets have advanced from frozen
to frigid. In our primary market of the
United States, the Consumer Confidence
Index has bounced off the bottom of a
30-year low, and most economists are
projecting modest GDP growth for 2010
and 2011 in a jobless recovery. The
equity markets rightfully remain cautious
under the weight of massive government
spending, sovereign debt concerns and
the inevitable call for growth-strangling
tax increases. Plenty of macro headwinds
remain, but the fear of economic
Armageddon seems to have abated.
With this improving but far-
from-rosy contextual backdrop, you
may be surprised to learn that I am
uncharacteristically upbeat about the road
ahead for Cash America. The clarity and
confidence I may have struggled to rally
last year have returned in spades. Plenty
of challenges and obstacles remain in
our path, but I am more confident than
ever that we have the right vision, the
right strategies and the right personnel
to maximize the value opportunity of our
core businesses while we also pursue new
opportunities to innovate and redefine our
business model and the markets we serve.
My outlook is admittedly buoyed
by the momentum we carry forward
following a very successful performance
in 2009. Our core U.S. pawn business
outperformed expectations in 2009,
with solid loan growth and a big assist
from higher gold prices. The storefront
cash advance business achieved an
impressive rebound following the
legislative/regulatory setbacks of 2008.
Our international diversification strategy
gained significant traction during the
year with aggressive store expansion in
Mexico, expansion of our online cash
advance offering into Australia and
Canada, and the ongoing maturation
of our online business in the United
Kingdom. Loss rates for our short-
term unsecured cash advance products
improved for the year, while delinquency
and charge-off rates on credit cards and
other forms of short-term consumer credit
were on the rise. Also, our nascent card
services business began to gain scale and
add incremental earnings to our cash
advance segment. Finally, our long-term
shareholders enjoyed the fruits of our
operational success with a gain in share
value that outstripped the Dow, S&P 500
and Russell 2000.
Those of you who know me well
realize that I view past accomplishments as
yesterday’s news. We clearly have bigger
and better things to achieve in our future.
That immortal twentieth-century
philosopher, Yogi Berra, is quoted as
saying, “If you don’t know where you
are going, you might wind up someplace
else.” Yogi’s quotes are designed to leave
you scratching your head, but I get this
one. I understand the importance of
vision and focus, and I clearly see where
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After-Tax Income from
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To my fellow shareholders
Cash America International, Inc.