Cash America 2011 Annual Report Download - page 57

26
financial institutions or other businesses that do not now offer products or services directed toward the Company’s
traditional customer base, many of whom may be much larger than the Company, could begin doing so. Significant
increases in the number and size of competitors for the Company’s business could result in a decrease in the number of
consumer loans or pawn loans that the Company writes, resulting in lower levels of revenues and earnings in these
categories. Furthermore, the Company has many competitors to its retail operations, such as retailers of new
merchandise, retailers of pre-owned merchandise, other pawnshops, thrift shops, internet retailers and internet auction
sites. Increased competition or aggressive marketing and pricing practices by these competitors could result in
decreased revenues, margins and turnover rates in the Company’s retail operations.
The Company’s growth is subject to external factors and other circumstances over which the Company has limited
control or that are beyond the Company’s control. These factors and circumstances could adversely affect the
Company’s ability to grow through the opening and acquisition of new operating units.
The Company’s expansion strategy includes acquiring existing stores and opening new ones. The success of
this strategy is subject to numerous external factors, such as the availability of attractive acquisition candidates, the
availability of sites with acceptable restrictions and suitable terms, the Company’s ability to attract, train and retain
qualified store management personnel, the ability to access capital, the ability to obtain required government permits and
licenses, the prevailing laws and regulatory environment of each state or jurisdiction in which the Company operates or
seeks to operate, which are subject to change at any time, the degree of competition in new markets and its effect on the
Company’s ability to attract new customers and the ability to adapt the Company’s infrastructure and systems to
accommodate its growth. Some of these factors are beyond the Company’s control. The failure to execute this
expansion strategy would adversely affect the Company’s ability to expand its business and could materially adversely
affect its business, prospects, results of operations and financial condition.
Future acquisitions and/or the failure to successfully integrate newly acquired businesses into the Company’s
operations could negatively impact the Company’s performance.
The Company has historically grown through strategic acquisitions, and a key component of the Company’s
future strategy is to continue to pursue attractive acquisition opportunities in order to expand its product and service
offerings and markets and grow its business in response to changing customer demands, regulatory environments,
technologies and competitive pressures. In some circumstances, the Company may expand its offerings through the
acquisition of complementary businesses, solutions or technologies rather than through internal development. The
identification of suitable acquisition candidates can be difficult, time-consuming and costly, and the Company may not
be able to successfully complete identified acquisitions. Furthermore, even if the Company successfully completes an
acquisition, it may not be able to successfully assimilate and integrate the business, technologies, solutions, personnel or
operations of the business that it acquires, particularly if key personnel of an acquired company decide not to work for
the Company. In addition, the Company may issue equity securities to complete an acquisition, which would dilute its
shareholders’ ownership and could adversely affect the price of the Company’s common stock. Acquisitions may also
involve the entry into geographic or business markets in which the Company has little or no prior experience or may
expose the Company to additional material liabilities. In addition, any acquisition has the risk that the Company may not
realize a return on the acquisition or the Company’s investment. Consequently, the Company may not achieve
anticipated benefits of the acquisitions, which could materially adversely affect the Company’s business, prospects,
results of operations and financial condition.
The Company’s foreign operations subject the Company to foreign exchange risk.
The Company is subject to the risk of unexpected changes in foreign currency exchange rates by virtue of its
loans to residents of Australia, Canada and the United Kingdom and its operations in Mexico. The Company’s results of
operations and certain of its intercompany balances associated with the Company’s Australia, Canada, United Kingdom
and Mexico loans are denominated in their respective currencies and are, as a result, exposed to foreign exchange rate
fluctuations. Upon consolidation, as exchange rates vary, net sales and other operating results may differ materially from
expectations, and the Company may record significant gains or losses on the remeasurement of intercompany balances.