Cash America 2011 Annual Report Download - page 94
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63
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,
2010 and 2009 (dollars in thousands):
Year Ended December 31,
2010 2009
Retail Commercial Total Retail Commercial Total
Proceeds from disposition $ 306,300 $ 228,578 $ 534,878 $ 283,208 $ 219,528 $ 502,736
Gross profit on disposition $ 121,819 $ 74,303 $ 196,122 $ 112,417 $ 66,042 $ 178,459
Gross profit margin 39.8 % 32.5 % 36.7 % 39.7 % 30.1 % 35.5 %
Percentage of total gross profit 62.1 % 37.9 % 100.0 % 63.0 % 37.0 % 100.0 %
The total proceeds from disposition of merchandise increased $32.1 million, or 6.4%, during 2010 from 2009,
and the total profit from the disposition of merchandise increased $17.7 million, or 9.9%, during 2010 from 2009. The
increase in proceeds and profits was mainly due to an increase in merchandise available for sale generated from
forfeitures from the Company’s higher pawn loan balances and an increase in merchandise purchased from customers
and third parties, combined with a slight improvement in the consolidated merchandise turnover rate, which increased to
3.0 times in 2010, compared to 2.9 times in 2009.
Proceeds from retail sales, including jewelry, increased $23.1 million, or 8.2%, during 2010 compared to 2009.
In addition, the profit margin on retail sales increased slightly to 39.8% in 2010, from 39.7% in 2009.
Proceeds from commercial dispositions increased $9.1 million, or 4.1%, in 2010, compared to 2009. The profit
margin on commercial sales increased to 32.5% in 2010, from 30.1% in 2009. Both the increases in proceeds and profit
margin on commercial sales are mainly due to a higher average market price of gold and diamonds sold, which more
than offset a lower volume of gold sold during 2010 compared to 2009.
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, 2010 and 2009 (dollars in
thousands):
Balance at December 31,
2010 2009
Balance at December 31, Amount % Amount %
Jewelry – held for one year or less $79,566 63.6 $70,834 61.9
Other merchandise – held for one year or less 39,809 31.8 35,328 30.8
Total merchandise held for one year or less 119,375 95.4 106,162 92.7
Jewelry – held for more than one year 2,685 2.2 4,938 4.3
Other merchandise – held for more than one year 3,039 2.4 3,424 3.0
Total merchandise held for more than one year 5,724 4.6 8,362 7.3
Total merchandise held for disposition $125,099 100.0 $114,524 100.0