Cash America 2009 Annual Report Download - page 76

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Pawn loan balances in domestic and foreign locations at December 31, 2009 were $188.3 million, which
was $19.6 million, or 11.6%, higher than at December 31, 2008. The average balance of pawn loans outstanding
for 2009 increased by $29.4 million, or 20.4%, compared to 2008. The increase in the pawn loan balances was
primarily due to the increase in pawn loan balances at Prenda Fácil as well as the growth in pawn loan balances at
certain cash advance storefront locations.
Annualized loan yield on pawn loans was 133.6% for 2009, compared to 128.8% in 2008. The higher
annualized yield is a function of the average rates for fees and service charges on pawn loans as well as the amount
of finance and service charges deemed to be collectible based on historical loan redemption statistics. The
Company’s domestic annualized loan yield increased to 131.8% in 2009, compared to 129.0% in 2008. The
increase was primarily due to improved performance and portfolio mix. In addition, the pawn loan yield related to
Prenda Fácil has higher annualized yields than the Company’s domestic operations, which also contributed to the
increase in the combined domestic and foreign annualized yield.
Proceeds from the Disposition of Merchandise. Profit from the disposition of merchandise represents the proceeds
received from the disposition of merchandise in excess of the cost of disposed merchandise. The following table
summarizes the proceeds from the disposition of merchandise and the related profit for 2009 as compared to 2008
(dollars in thousands):
Year Ended December 31,
2009 2008
Merchan- Refined Merchan- Refined
dise Gold Total dise Gold Total
Proceeds from disposition $ 283,208 $ 219,528 $ 502,736 $ 286,952 $ 178,703 $ 465,655
Profit on disposition $ 112,417 $ 66,042 $ 178,459 $ 117,673 $ 52,622 $ 170,295
Profit margin 39.7 % 30.1 % 35.5 % 41.0 % 29.4 % 36.6 %
Percentage of total profit 63.0 % 37.0 % 100.0 % 69.1 % 30.9 % 100.0 %
The total proceeds from disposition of merchandise and refined gold increased $37.1 million, or 8.0%, in
2009 compared to 2008, and the total profit from the disposition of merchandise and refined gold increased $8.2
million, or 4.8%, in 2009 compared to 2008. Overall profit margin decreased from 36.6% in 2008 to 35.5% in
2009, primarily due to lower profits on the retail disposition of merchandise combined with a higher percentage
mix of refined gold sold in 2009, which typically has a lower profit margin.
Proceeds from disposition of retail merchandise decreased $3.7 million, or 1.3%, in 2009 compared to
2008, primarily due to a generally soft economic environment and an absence of economic stimulus payments by
the U.S. government to individuals. In addition, the profit margin on the disposition of merchandise decreased to
39.7% in 2009, from 41.0% in 2008, resulting in a $5.3 million, or 4.5%, decrease in profit mainly due to
discounting of merchandise prices to encourage retail sales activity.
Proceeds from the disposition of refined gold increased $40.8 million, or 22.8%, in 2009 compared to 2008.
In recent periods, an increase in the pawn loan balances for loans secured by jewelry and the sale of gold items
purchased directly from customers, has increased the volume of refined gold sold by the Company. In addition, the
Company has experienced an increase in the volume of refined gold sold due to the introduction of gold buying
services during late 2008 and the first quarter of 2009 in many of the Company's cash advance storefront locations.
The profit margin on the disposition of refined gold increased to 30.1% in 2009 from 29.4% in 2008 due to a
combination of increased gold sales volumes and a higher average sales price of gold sold, which offset the higher
costs of gold sold in 2009.