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RAPAPORT... Cash America International Inc. reported that its revenue rose 7.9 percent year on year to $472.2 million during the third quarter that ended on September 30. Net revenue, meanwhile, increased 11.9 percent to $276.4 million and expenses rose 5.9 percent to $231.4 million as loss rates from the consumer loan portfolio were lower overall and pawn-related revenue was higher. The aggregate balance of consumer loans outstanding rose slightly as U.S. consumer loan growth outstripped the anticipated decline in foreign consumer loans related to changes in the regulatory environment in the U.K., the company noted. Total pawn loan balances in the U.S. were up 6.5 percent year on year and same-store pawn loan balances were up 2.1 percent. Profit fell 78.5 percent to $9.9 million as management implemented plans that generated $14.1 million in after-tax expenses related to the sale of non-strategic operations, the early repayment of long-term debt and a corporate reorganization for the retail services segment. One year earlier, Cash America gained an after-tax net benefit of $21.9 million from a tax credit that was partially offset by a significant litigation settlement during the period. During the quarter, Cash America sold non-strategic lending operations, including the disposition of 47 locations in Mexico and five locations in Colorado, which generated approximately $21.5 million in net cash proceeds, but contributed to an aggregate loss of $6.4 million after taxes. In addition, the company purchased $103.5 million of its outstanding long-term fixed-rate senior notes in the open market during the third quarter, which generated $6 million in pretax charges. Daniel R. Feehan, the president and CEO of Cash America, said, “We have completed a variety of strategic initiatives during the third quarter, including the refocusing of our domestic pawn operations and the positioning of our ecommerce segment to be an independent public company. We have taken the steps we feel have the greatest potential for delivering long-term value to our shareholders for many periods in the future. Operationally, we also successfully moved through the initial transition of our U.K. ecommerce business to meet the new regulatory requirements in the U.K. and we maintained our positive metrics of pawn lending that started in the second quarter.” Cash America declared a 3.5-cent per share cash dividend on common stock outstanding. The dividend will be paid at the close of business on November 19 to shareholders of record on November 5. Looking ahead, management anticipates that demand for consumer loan products will continue on a similar pace during the fourth quarter, with a continued heavier-weighted consumer loan portfolio and longer-term installment and line of credit products.
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