Cash America 2013 Annual Report Download - page 38

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The Company’s e-commerce segment utilizes proprietary and custom-designed technology platforms that are
built for scalability and flexibility. The technology platforms are designed to be powerful enough to handle the large
volumes of data required to evaluate customer applications and flexible enough to capitalize on changing customer
preferences, market trends and regulatory changes. Further, the information gathered from these technology platforms
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 also uses a proprietary point-of-sale system for its retail services
locations. The Company will continue to pursue new customer acquisition through channels such as lead generation
(sourcing potential customers via third-party lead providers, which use digital, email or other marketing efforts to
acquire and provide the Company with loan applicants), traditional advertising and digital advertising.
In some instances in the past, legislative and regulatory activity affecting the Company’s consumer loan
products has led the Company to also explore new credit product alternatives to help its customers meet their short-term
credit needs. While some legislative and regulatory actions in certain states where the Company operates has reduced the
revenue per loan to levels that make the product less profitable or unattractive, these regulatory changes do not eliminate
the credit needs of the Company’s customers. The Company remains committed to finding new and innovative solutions
to help its customers avoid higher cost alternatives, such as overdraft protection, returned check fees and late charges on
bills, in the absence of alternatives such as the Company’s consumer loan products.
Expansion Considerations for Retail Services Locations
The Company’s retail services 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
loan business, general economic conditions and other 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 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 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 unable to maintain these required levels of unencumbered net assets. At present,
these requirements do not limit the Company’s growth opportunities.