Cash America 2009 Annual Report Download - page 80

52
Year Ended December 31,
2009 2008
Pawn
Lending
Cash
Advance
Check
Cashing Total
Pawn
Lending
Cash
Advance
Check
Cashing Total
Check cashing fees $431 $3,703 $311 $4,445 $646 $4,911 $400 $5,957
Royalties 755 - 2,411 3,166 713 - 2,926 3,639
Other 2,785 4,167 57 7,009 2,384 3,499 62 5,945
$3,971 $7,870 $2,779 $14,620 $3,743 $8,410 $3,388 $15,541
Operations Expenses. Consolidated operations expenses, as a percentage of total revenue, were 32.1% in both
2009 and 2008. These expenses increased $29.4 million, or 8.9%, in 2009 compared to 2008.
In 2009, pawn lending operating expenses increased $21.2 million, or 9.9%, to $236.4 million when
compared to 2008, primarily due to higher personnel costs related to the combined effects of the addition of Prenda
Fácil, staffing increases and the cost of personnel benefits related to the pawn lending activities. The operations
expenses for the cash advance activities increased $8.2 million, or 7.2%, to $122.5 million in 2009 compared to
2008, primarily due to a $9.5 million increase in marketing expenses in the Company’s cash advance segment,
primarily from the internet channel’s efforts to expand the Company’s customer base both domestically and
internationally, as well as expenses for new product development activities. These higher expenses at the
Company’s internet channel were partially offset by lower operating expenses for storefront activities due to
locations that were closed in 2008 and the absence of costs related to development activities supporting a
referendum to overturn Ohio legislation related to short-term cash advances in November 2008.
The Company’s operations expenses are predominately related to personnel and occupancy expenses.
Personnel expenses include base salary and wages, performance incentives and benefits. Occupancy expenses
include rent, property taxes, insurance, utilities and maintenance. The combination of personnel and occupancy
expenses represents 75.9% of total operations expenses in 2009 and 77.9% in 2008. The comparison is as follows
(dollars in thousands):
Year Ended December 31,
2009 2008
% of % of
Total Total
Amount Revenue Amount Revenue
Personnel $192,133 17.0 % $181,118 17.6 %
Occupancy 81,190 7.2 76,499 7.4
Other 86,804 7.9 73,127 7.1
Total $360,127 32.1 % $330,744 32.1 %
The increase in personnel expenses is primarily due to Prenda Fácil’s labor costs, the growth of the
Company’s internet channel and normal recurring salary adjustments. The increase in occupancy expense is
primarily due to recurring rent and property tax increases as well as the increase in occupancy expense associated
with Prenda Fácil. These increases were partially offset by the closure of 56 cash advance storefront locations in
2008.
During 2008, the Company had a total of $3.2 million of personnel and occupancy charges associated with
the closing of 56 cash advance storefront locations during the year. Of the $3.2 million, approximately $1.6 million