Cash America 2010 Annual Report Download - page 80

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Proceeds from disposition of merchandise. The following table summarizes the proceeds from the
disposition of merchandise and the related profit in the Company’s domestic pawn operations for the years ended
December 31, 2009 and 2008 (dollars in thousands):
Year Ended December 31,
2009 2008
Retail Commercial Total Retail Commercial Total
Proceeds from disposition $ 283,208 $ 219,528 $ 502,736 $ 286,952 $ 178,703 $ 465,655
Gross profit on disposition $ 112,417 $ 66,042 $ 178,459 $ 117,673 $ 52,622 $ 170,295
Gross profit margin 39.7 % 30.1 % 35.5 % 41.0 % 29.4 % 36.6 %
Percentage of total gross profit 63.0 % 37.0 % 100.0 % 69.1 % 30.9 % 100.0 %
The total proceeds from disposition of merchandise increased $37.1 million, or 8.0%, during 2009 from 2008,
and the total profit from the disposition of merchandise increased $8.2 million, or 4.8%, during 2009 from 2008,
mainly due to higher proceeds and profit margin on commercial sales, offset by lower proceeds and profit margin on
retail sales. The consolidated merchandise turnover rate remained flat at 2.9 times in 2009 compared to 2008.
Proceeds from disposition of merchandise in retail services locations, including jewelry, decreased $3.7
million, or 1.3%, during 2009 from 2008, primarily due to a generally soft economic environment and an absence of
economic stimulus payments by the U.S. government to individuals in 2009. In addition, the profit margin on the
disposition of merchandise decreased to 39.7% in 2009, from 41.0% in 2008, due to discounting of merchandise prices
to encourage retail sales activity.
Proceeds from commercial dispositions increased $40.8 million, or 22.8%, during 2009 over 2008. The profit
margin on commercial sales increased to 30.1% in 2009, from 29.4% in 2008. During 2009, an increase in pawn loan
balances for loans secured by jewelry and the sale of gold items purchased directly from customers increased the
volume of commercial sales by the Company. In addition, the Company 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 retail services locations. Both the increases in proceeds and profit margin on commercial sales are
mainly due to increased gold sales volumes and a higher average market price of gold sold, which more than offset a
higher cost of gold sold during 2009 compared to 2008.
The table below summarizes the age of merchandise held for disposition related to the Company’s domestic
pawn operations before valuation allowance of $0.7 million as of both December 31, 2009 and 2008 (dollars in
thousands).
Balance at December 31,
2009 2008
Amount % Amount %
Jewelry – held for one year or less $70,834 61.9 % $72,780 66.1 %
Other merchandise – held for one year or less 35,328 30.8 28,979 26.3
Total merchandise held for one year or less 106,162 92.7 101,759 92.4
Jewelry – held for more than one year 4,938 4.3 5,306 4.8
Other merchandise – held for more than one year 3,424 3.0 3,128 2.8
Total merchandise held for more than one year 8,362 7.3 8,434 7.6
Total merchandise held for disposition $114,524 100.0 % $110,193 100.0 %