Cash America 2013 Annual Report Download - page 108

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The total proceeds from disposition of merchandise increased $14.9 million, or 2.2%, during 2012 from 2011.
The total gross profit from the disposition of merchandise decreased $15.7 million, or 6.5%, during 2012 from 2011,
primarily due to lower gross profit on commercial sales. The overall profit margin percentage decreased to 32.1% in
2012 from 35.0% in 2011, due mainly to a higher cost of goods sold on commercial sales compared to 2011, and to a
lesser extent, a decrease in gross profit percentage on retail sales in 2012 compared to 2011. The consolidated
merchandise turnover rate decreased slightly to 3.0 times during 2012 compared to 3.1 times in 2011.
Proceeds from retail dispositions of merchandise increased $32.9 million, or 9.2%, during 2012 from 2011.
Domestic retail operations contributed $21.7 million of the increase, primarily due to the net addition of retail services
locations through acquisitions and de novo store growth. Foreign retail operations contributed $11.2 million of the
increase, primarily due to increased sales of general merchandise in 2012 compared to 2011. The Company’s domestic
and foreign operations both experienced a decrease in retail gross profit margin, as the consolidated gross profit margin
on the retail disposition of merchandise decreased to 36.8% in 2012 from 38.4% in 2011. The decrease was primarily
due to the continued discounting of merchandise prices to encourage retail sales activity.
Proceeds from commercial dispositions decreased $18.0 million, or 5.4%, during 2012 over 2011. Proceeds
from commercial dispositions decreased $16.7 million and $1.3 million, respectively, in foreign and domestic markets.
The $16.7 million decrease in foreign proceeds was due mostly to lower volumes of gold sold in 2012 as compared to
2011. The $1.3 million decrease in domestic markets was composed of a $5.1 million decrease due to lower volumes of
gold sold, primarily as a result of lower purchases of gold from customers during 2012, and, to a lesser extent lower
forfeitures of jewelry items during 2012 compared to 2011. This decrease was partially offset by a $3.9 million increase
in proceeds from commercial dispositions from higher sales of diamonds in 2012 as compared to 2011.
Consolidated gross profit from commercial dispositions decreased $22.2 million to $81.5 million, of which
domestic operations contributed $16.2 million and foreign operations contributed $6.0 million. The consolidated gross
profit margin on commercial sales decreased to 26.1% in 2012 from 31.4% in 2011.The decrease in consolidated gross
profit from commercial dispositions was mainly due to lower volumes of gold sold and a higher average cost of gold
sold relative to a smaller increase in the market price per ounce of gold sold in both domestic and foreign operations.
The table below summarizes the age of merchandise held for disposition related to the Company’s pawn
operations before valuation allowance of $0.9 million and $0.7 million as of December 31, 2012 and 2011, respectively
(dollars in thousands):
As of December 31,
2012 2011
Amount % Amount %
Jewelry – held for one year or less $99,466 59.1 $99,683 61.3
Other merchandise – held for one year or less 59,914 35.6 56,483 34.8
Total merchandise held for one year or less 159,380 94.7 156,166 96.1
Jewelry – held for more than one year 3,283 2.0 2,626 1.6
Other merchandise – held for more than one year 5,597 3.3 3,792 2.3
Total merchandise held for more than one year 8,880 5.3 6,418 3.9
Total merchandise held for disposition $168,260 100.0 $162,584 100.0
Consumer Loan Activities
Consumer Loan Fees
Consumer loan fees increased $182.9 million, or 30.5%, to $781.5 million in 2012 compared to $598.6 million
in 2011. The increase in consumer loan fees is primarily due to growth in consumer loan balances in the e-commerce
segment. The percentage of consumer loan fees from foreign operations to consumer loan fees from the e-commerce
segment and total consolidated consumer loan fees increased in 2012 compared to 2011 as the Company’s e-commerce
business continued to experience growth primarily in the United Kingdom. In 2012, consumer loan fees from the foreign