Cash America 2010 Annual Report Download - page 39

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10
Domestically and internationally, the consumer credit market is evolving, which will create new opportunities for the
Company to reach customers who have not previously considered using its traditional products and services. Also, the
Company hopes to attract new customers through the offering of new products such as installment loans. The
Company plans to utilize marketing and promotional campaigns to pursue new customers and to gain market share by
expanding the number of customers being served through its retail services and e-commerce operations.
The Company has developed a proprietary system that is used to monitor and collect data about the credit
performance of customers who use its consumer loan products. The information that the Company derives from this
system aids it in the decision to provide its consumer loan services to potential customers. Further, this information
allows the Company to focus on both existing and potential customers who it believes are more likely to provide the
Company with better credit performance. Through this approach, the Company is able to build a valuable list of
consumers who both use the credit products offered and to whom the Company can market its product offerings to
help fulfill the customer’s credit needs. The Company is developing a proprietary point-of-sale system which it
expects to begin rolling out to its retail services locations in the second half of 2011. This new system includes a
single integrated, state-of-the-art system which will create efficiencies within the retail services locations and allow the
Company to offer more services to its customers.
Expansion Considerations
The Company’s expansion program is subject to numerous unpredictable factors, such as the availability of
attractive acquisition candidates or sites on suitable terms, market and regulatory conditions in the pawn or consumer
loan business, general economic conditions and other factors described under “Item 1A. Risk Factors.” Among the
primary factors that could affect the Company’s future planned expansion are:
•Statutory Requirements. The Company’s ability to add start-up locations depends on the Company’s
ability to obtain all necessary licenses required to open a new location. In addition, the current
statutory and regulatory environment of some states renders expansion into those states impractical.
•Availability of Real Estate. The Company’s ability to add start-up locations is subject to locating
satisfactory real estate sites on terms and conditions acceptable to the Company. Factors that could
limit the availability of acceptable real estate sites could include changes in general economic
conditions, increases in real estate values or market rents, increases in competition for suitable real
estate, changing demographics in surrounding areas, restrictive zoning or sign ordinances, limited
visibility or accessibility to public streets, excessive finish-out costs and other factors.
•Competition. Several competing pawnshop and consumer loan companies are also pursuing expansion
and acquisition programs. A number of smaller companies and private equity firms have also entered
the market. While the Company believes that it is the largest pawnshop operator and one of the largest
consumer loan operators in the United States, there can be no assurance that it will be more successful
than its competitors in pursuing acquisition opportunities and securing attractive start-up locations.
Increased competition could also increase prices for attractive acquisition candidates and could
adversely affect the performance of potential acquisition targets.
•Availability of Qualified Store Management Personnel. The Company’s ability to expand may also be
limited by the availability of qualified store management personnel. While the Company seeks to train
its existing personnel to enable those capable to assume management positions, there can be no
assurance that sufficient qualified personnel will be available to satisfy the Company’s needs with
respect to its planned expansion.
•Capital Requirements. In some states, the Company is required by law to maintain a minimum amount
of certain unencumbered net assets per licensed location. The Company’s expansion plans will
therefore be limited in these states to the extent the Company is able to maintain these required levels
of unencumbered net assets. At present, these requirements do not limit the Company’s growth
opportunities.